China and the EU are trying to reach an agreement on the electric car dispute, but time is running out

The European Union and China have been fighting over customs fees for electric cars for several months now, and the bickering between the parties has continuously taken new turns.

At the heart of the dispute has been China’s support for electric car manufacturers, which has led to Chinese cars being sold in Europe at reduced prices.

This, in turn, has led the EU authorities to consider possible tariffs on Chinese electric cars to protect their own car industry.

Chinese electric car manufacturers have also expanded their operations to Europe, which has caused concern about the industry’s future and employment.

After the EU’s customs proposals, China again began to consider import restrictions for European products such as food and wine in various sectors. The country also disputed the issue of EU customs In the World Trade Organization eli WTO:ssa.

Promising meetings

Now, however, it seems that both parties are willing to reach at least some semblance of an agreement on the matter and find ways to prevent the tariffs from being introduced before the soon-to-expire deadline.

The tariffs would come into effect for five years after the EU vote next week.

EU Trade Commissioner Valdis Dombrovskis met the Chinese Minister of Trade on Thursday Wang Wentaon and he described the meeting as constructive.

“The parties agreed to step up efforts to find an effective, enforceable and World Trade Organization-compatible solution,” Dombrovskis announced on the messaging service X.

The situation has intensified between the parties after Spain proposed to the EU up to 36 percent of tariffs on Chinese electric cars. The proposal, on the other hand, resulted from China’s attempts to limit the import of pork from the EU, as the country is the EU’s largest exporter of pork.

China had previously offered the EU bloc concessions on prices, but the EU rejected them.

Geopolitical tension can be seen as a dispute

The trade deals reflect broader tensions between Western countries and China.

If the goal of electric vehicle tariffs is to force China to change its policies and practices, they are unlikely to succeed in their goal.

China is committed to its economic model, strategic development goals and industrial policy, which were confirmed by the General Assembly of the Government in July 2024.

The country’s trade policy has recently been called ice-cold by international investors, and measures to boost the economy have been seen as ineffective. The government has seen electric vehicle tariffs as direct discrimination and protectionism from the West.

Unilateral trade deals are likely to only cause retaliation and not change the political attitude itself.

China may expand its production to other parts of Asia and explore new export markets such as Australia.

If no agreement can be found, litigation under the WTO would be one mediation option. It is not necessarily an efficient way to resolve disputes, as the WTO does not have cross-border enforcement powers.

It is believed that China is willing to reach some sort of agreement, as continuing the dispute would make it difficult for both parties’ market position.

China’s electric car market has suffered from the country’s weakened economic situation, and European tariffs would bring more worries to the industry.