BYD's electric vehicle, the Ato 3, is seen at a BYD showroom in Paris, France, in June. Nathan Lane/Bloomberg
The BYD Atto 3 electric vehicle is displayed at a BYD showroom in Paris, France, in June. Nathan Lane/Bloomberg File. China has filed a complaint with the World Trade Organization over the European Union's decision to impose anti-subsidy tariffs on Chinese electric vehicles, escalating an already tense dispute between the two countries.
Beijing brought the matter to the WTO's dispute settlement mechanism on Friday, according to a statement from China's Ministry of Commerce, whose aim is to “safeguard the development rights and interests” of the EV industry, the ministry added.
“The EU's provisional conclusions lack factual and legal basis,” a ministry spokesman said. “They flagrantly breach WTO rules and undermine international cooperation on tackling climate change.”
“We urge the EU to immediately rectify its wrongdoings and jointly safeguard China-EU economic and trade cooperation and the stability of the EV supply chain,” the spokesman added.
Relations between Beijing and the EU have hit new lows in recent months as the EU has moved its China policy closer to that of the U.S. Last month, the EU imposed temporary tariffs of up to 48% on some car imports from China after a months-long investigation into Chinese government aid to electric vehicle makers.
The move drew swift condemnation from Beijing, which has already threatened retaliation against European farmers and aircraft makers and launched an anti-dumping investigation targeting France's liquor industry.
“At this point, the WTO case is of limited use because it will likely take at least two years to reach a conclusion,” said Henry Gao, a law professor at Singapore Management University who studies Chinese trade policy. “Even if China ultimately prevails, it will be hard for Chinese EVs to regain market share that they have lost.”
Chinese state-owned automaker SAIC Motor Corp. faces tariffs of up to 37.6 percent on top of the existing 10 percent rate, while Volvo Car's parent company Geely Automobile and BYD Auto face additional tariffs of 19.9 percent and 17.4 percent respectively.
The EV sector has become increasingly embroiled in tensions over trade and geopolitics as the world moves away from internal combustion engines. China has taken a lead in EVs, partly because it sees them as essential for the environment and the economy and has invested heavily in them.
The United States has also sought to impose tariffs of over 100% and restrict imports of Chinese-made EVs, accusing China of flooding the world with cheap products, particularly in new green industries. Canada is currently considering similar measures.
China has also filed a WTO complaint about U.S. EV subsidy rules, arguing they are discriminatory. The Biden administration has imposed restrictions that mean vehicles that source battery parts or raw materials from “foreign companies of concern” are ineligible for purchase tax credits of up to $7,500.
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