EU should drop politically motivated mentality in trade talks over EV tariffs with China, as cooperation – not confrontation – needed for China-EU trade ties: experts

The EU should listen more to internal voices within the bloc before announcing any decision to impose additional tariffs on Chinese electric vehicles (EVs), Chinese experts said on Sunday, as EU member states are reportedly set to vote on Monday on the trade matter.

As trade talks are ongoing, experts stressed that cooperation, not confrontation, is needed in bilateral trade relations.

EU member states are set to vote on imposing provisional tariffs on China-made EVs, Reuters reported, citing sources, in what it described "the first test of support for Brussels' landmark trade case."

The report said that Germany, whose vehicle makers obtained one-third of their sales in the Chinese market last year, is set to abstain in Monday's vote in the spirit of "critical solidarity" with the European Commission (EC).

The first vote for EU member states is written and confidential, and it is non-binding. At the provisional stage, the EC has full power to impose duties, although it consults EU members and is supposed to take their positions into account, the report said.

These internal consultations, which would take place on Monday, are unlikely to have much of an effect on the EC's final judgment, as China-EU negotiations are ongoing and the final outcome is likely to be determined in November, Ye Bin, a research fellow specializing in EU laws at the Institute of European Studies at the Chinese Academy of Social Sciences, told the Global Times on Sunday.

The Chinese expert urged the EU to listen more to internal voices within the bloc, especially industry players that will bear the brunt should the tariffs be imposed.

Germany's reported move serves as the latest and important reflection of opposition to EV tariffs targeting China. German industries may be worried about the consequence from the additional tariffs and possible trade tensions on both sides, so they chose to express some concerns, Ye said.

"Germany's reported abstention on this issue shows that it neither explicitly opposes it nor does it want to intensify conflicts, which may reflect Germany's desire to seek balance within its industry and tone down some concerns in its industry," Ye said. "But it also reflects that the German industry's opposition to EU policies still plays a certain role."

On July 4, the EC ruled that the individual duties applying to the three sampled Chinese producers are 17.4 percent for BYD, 19.9 percent for Geely and 37.6 percent for SAIC. Other EV producers in China, which cooperated in the investigation but were not sampled, are subject to the 20.8 percent weighted average duty.

China has been an active player in trade talks over the EV tariffs and the EU, including its member countries, has been in talks with China over the issue.

"The Chinese government has used the utmost sincerity, strived for maximum dialogue and tried its best to do what it should do," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Sunday.

However, the actual trade talks are still full of challenges and will be difficult, Bai said, urging the EU to meet China halfway.

It is important for the EU to understand that cooperation, and not confrontation, should play a key role in bilateral economic and trade ties, Bai said. The EU has been a direct beneficiary of cooperation with the Chinese car industry, highlighted by the increasing investment that has helped facilitate the region's green transformation.

According to the report "Greening Europe: Report on Development of Chinese NEV Manufacturers in Europe," co-authored by the China Chamber of Commerce to the European Union (CCCEU) and the China Economic Information Service, which was launched on June 19 in Brussels, Chinese companies in the new-energy vehicle (NEV) sector have been increasing their investment and cooperation in Europe.

As of the end of 2023, Chinese NEV companies had set up more than 20 research and development centers and production bases in Europe, creating jobs and establishing close partnerships with local supply chains, and boosting the development of Europe's new-energy industry, according to the CCCEU.

Also at that point, China had 8.596 million charging facilities, with public charging exceeding 80 percent in 17 major cities, the CCCEU said. In contrast, the EU had about 630,000 public charging stations, falling far short of the European Automobile Manufacturers Association's prediction of needing a staggering 8.8 million by 2030 to meet consumer demand.

Without additional tariffs, both sides will share greater benefits, given the industry's high complementarity, which requires more cooperation and not confrontation, experts said.

"Enhancing collaboration with China, instead of pursuing decoupling and succumbing to trade protectionism, will enable the EU to optimize its interests in the industry chain upgrade and the transition to EVs," Bai said.