The European Union has slapped extra provisional duties of up to 38 percent on Chinese electric car imports because of "unfair" state subsidies, despite Beijing's warnings the move would unleash a trade war. But company reps in both China and Europe are critical of the steps.
Brussels launched an investigation last year into Chinese electric vehicle manufacturers to probe whether state subsidies were unfairly undercutting European automakers.
Since announcing the planned tariff hike last month, on top of current import duties of 10 percent, the European Commission has begun talks with Beijing to try to resolve the issue, with China threatening retaliation.
"Our investigation... concluded that the battery electric vehicles produced in China benefit from unfair subsidisation, which is causing a threat of economic injury to the EU's own electric car makers," the EU's trade chief Valdis Dombrovskis said.
The move comes despite talks between Chinese and EU trade officials on 22 June, but Brussels will continue "to engage intensively with China on a mutually acceptable solution", according to Dombrovskis.
Retaliation
Beijing has already signalled its readiness to retaliate by launching an anti-dumping probe last month into pork imports, threatening Spanish exports. Chinese media suggest Beijing will trigger further probes.
Chinese officials have also railed against probes targeting state subsidies in the green tech sector, including wind turbines and solar panels.
"It is plain for all to see who is escalating trade frictions and instigating a 'trade war'," a spokesperson for the Chinese commerce ministry said on 21 June.
But in a likely attempt to diffuse tensions, China's President Xi Jinping made a congratulatory call on Thursday to incoming European Council President Antonio Costa just hours before European Commission curbs on Chinese electric cars are scheduled to take effect.
According to Chinese state media, Xi said he "attaches great importance to the development of China-EU relations" and that China "is committed to developing the China-EU comprehensive strategic partnership".
'Dead end'
Meanwhile, German auto giant Volkswagen on Thursday said EU moves to impose provisional extra duties of up to 38 percent on Chinese electric car imports over subsidy concerns were "detrimental" to the European market.
"Countervailing duties are generally not suitable for strengthening the competitiveness of the European automotive industry in the long term – we reject them," Volkswagen said in a statement.
And BMW chief Oliver Zipse said the tariff battle between the EU and China "leads to a dead end".
"It does not strengthen the competitiveness of European manufacturers. On the contrary: it harms the business model of globally active companies," Zipse said in a statement.
Germany's VDA auto industry association said there was a "real risk of escalation in the trade conflict with China" if the EU pushed ahead with the tariff rises.
"Chinese countermeasures could severely hit the European economy", especially sectors with large exports to China, the VDA said.
The industry association called on the EU to cancel the tariff increases and find a "negotiated solution" with Beijing.
(with newswires)
