Senior officials from both China and the EU said on Saturday that negotiations on the proposed tariffs on Chinese-made electric cars (EVs) entering the European market had begun.

Robert Habeck, Germany’s minister of economics, claimed that EU commissioner Valdis Dombrovskis had told him that there will be formal tariff talks with China.

Following the announcement that Wang Wentao, the head of China’s commerce ministry, and Dombrovskis, the executive vice president of the European Commission, had decided to begin discussions over the EU’s anti-subsidy probe into Chinese electric vehicles, the confirmation was made.

In Shanghai, Habeck stated, “This is new and surprising in that it has not been possible to enter into a concrete negotiation timetable in the last few weeks.”

It’s only the beginning, he continued; many more will be needed. “It is a first step that was not possible before, but we are still a long way from the finish line.”

The minister had previously stated on Saturday that talks over EU levies on Chinese goods were welcome at any time.

“After meeting with Chinese officials in Beijing, I suggested to my Chinese partners that the doors are open for discussions. I hope that this message was heard,” he stated in his first public remarks in Shanghai.

Habeck is the first senior European official to come since Brussels suggested imposing high tariffs on EV imports built in China in an effort to counteract what it views as exorbitant subsidies.

Habeck stated that although he supports free markets, they also need equal playing fields and that there is time for discussion on tariff problems between the EU and China prior to the penalties taking full effect in November.

The minister stated that corporations cannot accept proven subsidies meant to boost their export advantages.

China’s backing of Russia in its conflict in Ukraine is another source of friction between Beijing and Berlin. Habeck pointed out that last year, commerce between China and Russia grew by more than 40%.

According to Habeck, he had communicated to Chinese authorities that their business relationship was suffering as a result. “Violations of the sanctions imposed against Russia are unacceptable,” he declared, stressing that European-made technology shouldn’t find its way onto the front lines of conflict through the actions of other nations.

Provisional tariffs by the EU of up to 38.1% on imported Chinese electric vehicles (EVs) will take effect on July 4; the investigation will last until November 2, at which point final duties, usually for a period of five years, may be imposed.

“This initiates a stage in which discussions are crucial, dialogue is required, and negotiations are feasible,” Habeck stated.

Habeck informed Chinese officials previously in Beijing that proposed EU taxes on Chinese imports are not a “punishment.” “Understanding that these are not punitive tariffs is crucial,” he stated during the opening plenary of the dialogue on climate change.

He stated that the EU has not imposed punitive tariffs, unlike the US, Brazil, and Turkey. “Things are done differently in Europe.”

According to Habeck, the European Commission looked into whether Chinese firms had improperly profited from subsidies for nine months.

He clarified that any countervailing tariff measures arising from the EU study “are not a punishment” and that their purpose was to make up for Beijing’s benefits to Chinese firms.

The National Development and Reform Commission chairman of China, Zheng Shanjie, retorted, saying, “We will do everything to protect Chinese companies.”

Zheng continued, “Proposed EU duties on Chinese-made EVs would hurt both sides.” He expressed to Habeck his expectation that Germany will lead the EU and “do the right thing.”

Additionally, he refuted claims of unfair subsidies, asserting that China’s new energy sector’s growth was the outcome of broad advantages in market, industrial supply chains, and technology, all of which were encouraged by intense competition.

Zheng stated during the meeting that “competition, rather than subsidies, let alone unfair competition,” is what has led to the industry’s rise.

Following his discussion with Zheng, Habeck had a conversation with Wang Wentao, the Chinese Commerce Minister, who informed him that he would hold a video conference with EU Trade Commissioner Valdis Dombrovskis on Saturday night to discuss the duties.

“Leeway is available for discussion and manoeuvring, and I hope that this leeway will be utilised,” stated Habeck.

Chinese automaker SAIC Group 600104 was in case the talks failed to come to an agreement.A variety of innovative items have been created by SS in reaction to the possibility of tariffs.

Chief design officer Shao Jingfeng of the SAIC Motor R&D Innovation Headquarters posted images of various products on his Weibo social media account. The products included skateboards, hoodies, sneakers, cups, umbrellas and table tennis paddles. The images were primarily black and yellow, with the EU emblem and the number “38.1”—a reference to the level of tariffs—emblazoned on them.

Shao stated on Weibo, “What doesn’t kill you makes you stronger.” “Recall that 38.1.”

(Adapted from APNews.com)

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