China has complained to the WTO about the EU's customs duties on electric vehicles.

China has filed a complaint with the World Trade Organization (WTO) regarding the European Union (EU), which has imposed additional customs tariffs on imported electric vehicles.

In a statement from the Chinese Ministry of Commerce, it was noted that there was disagreement regarding the steps taken concerning the additional customs tariffs imposed on Chinese manufacturers, citing that the sector is state-supported following the subsidy investigation initiated by the EU last year. The statement expressed that the Beijing administration would take all necessary measures to protect the legitimate rights and interests of Chinese companies, and it was recorded that they have resorted to the WTO's dispute resolution mechanism in this regard. The statement emphasized that China is in favor of resolving disputes through dialogue and mentioned that new phase negotiations are being conducted with the EU, stating, "We hope that the European side will cooperate constructively with China and that a solution can be reached that both sides will accept and will not lead to trade friction."

ADDITIONAL TAX RATES ANNOUNCED

The EU Commission announced yesterday that the subsidy investigation into electric cars produced in China has been completed and that additional customs duties have been imposed on the import of electric cars from this country to the EU for five years. With the new regulation, which will come into effect tomorrow after being published in the EU Official Journal today, a 7.8% additional tax will be imposed on models produced by the American electric vehicle manufacturer Tesla in China, 17% on the Chinese company BYD, 18.8% on Geely, 20.7% on manufacturers cooperating in the investigation, and 35.3% on state-owned SAIC Motor and other companies that did not cooperate.

TRADE WAR BETWEEN CHINA AND THE EU

The tariff increases following the subsidy investigation initiated by the Commission in October 2023 seem likely to spark a trade war between China and the EU. The Chinese Ministry of Commerce had announced that it would impose temporary customs duties on cognacs imported from EU countries after the approval of tariff increases by EU countries on October 4. Additionally, China had previously initiated anti-dumping investigations on imported pork products from Europe and subsidy investigations on dairy products.

RETALIATORY DECISION FROM BEIJING

The Beijing administration is also signaling that it may impose additional customs tariffs on cars imported from Europe. The Ministry of Commerce had announced plans to increase customs tariffs on gasoline imported vehicles with large engine capacities. Such a move is expected to negatively impact companies from EU countries that export a large portion of high-capacity vehicles to China.