Written by Cláudio Afonso | LinkedIn | X
German media outlet Handelsblatt reported on Thursday that the recently escalated trade war between the U.S. and China is accelerating the negotiations between the European Union and the country led by Xi Jinping.
As expansion into the U.S. market appears increasingly unlikely, China is shifting its focus to negotiating with EU leaders to cancel the tariffs imposed late last year on all fully electric vehicles imported into Europe.
The European Commission began imposing provisional countervailing duties on Chinese EV imports on October 31, 2024, following an anti-subsidy probe launched in 2023.
The tariffs, which add to the EU’s standard 10% import duty, range from 7.8% on Tesla’s Shanghai-built vehicles to as high as 35.3% on models from state-owned SAIC Motor, which owns the MG brand. BYD and Geely face rates of 17.0% and 18.8%, respectively.
“According to information from Handelsblatt, very concrete steps are already being discussed,” the German outlet wrote on Thursday.
EU Trade Commissioner Sefcovic and China’s Commerce Minister Wang said on Thursday they agreed to investigate the possibility of setting minimum prices for the imported EVs as an alternative to tariffs.
Last October, the EU rejected a Chinese proposal to set a minimum price of €30,000 ($32,400) for Chinese-made EVs sold in Europe. Brussels dismissed the plan, stating that the issue extends beyond pricing and must address the underlying subsidies that distort competition in the European single market.
U.S.-listed Chinese stocks jumped on the report paring earlier losses. As of the time of writing, XPeng shares are trading 3.4% higher, Nio 1.2%, and Li Auto 3.5%. Zeekr shares are still trading in the red despite the 3% jump from intraday lows.
As EV reported last week, the European Union and China have agreed to restart discussions over proposed price commitments marking the first signs of renewed dialogue since talks stalled late last year.
In addition to early entrants like BYD, Nio, XPeng, or Zeekr, which began selling fully electric models in Europe in recent years, a new wave of Chinese automakers is expanding into the region. These include Changan Group with its Avatr and Deepal brands, GAC’s Aion brand, and Chery Auto.
China’s Ministry of Commerce said a week ago that both sides have committed to promptly resuming negotiations aimed at fostering a more favorable environment for investment and industrial cooperation between Chinese and European firms.
In January, SAIC, BYD, and Geely challenged the measures before the Court of Justice of the European Union.
Beijing has consistently criticized the tariffs, calling them discriminatory and politically motivated. In late 2024, China filed a formal complaint at the World Trade Organization, seeking to overturn the EU’s countervailing duties.