As China begins its charm offensive to replace U.S. trade with other Western markets, the EU agrees to enter negotiations to replace its tariffs on Chinese battery-electric vehicles with an agreement on minimum product prices.
The negotiations, confirmed by a spokesperson from Europe’s trading body, the European Commission, had been earlier reported by the German newspaper Handelsblatt.
EU trade commissioner Maros Sefcovic has spoken with Chinese Commerce Minister Wang Wentao and both sides agreed to look into setting minimum prices, the EU spokesperson tells Reuters.
China’s Commerce Ministry said in a statement that negotiations were set to start immediately.
Sefcovic has previously said any minimum prices would need to be as effective and enforceable as the EU tariffs.
Previous minimum price deals agreed to by the EU have been applied to base commodities rather than complex products like cars. The Commission previously said it believes a single minimum price alone would not be adequate to counter unfair China state subsidies to its automakers.
If an agreement can be reached, the EU will scrap its tariffs enacted last October of up to 45.3% on top of the economic bloc’s standard 10% import duty on foreign-made vehicles.
China’s efforts with the EU fall in line with its President Xi Jinping’s scheduled visits to East Asian nations next week, including Cambodia, Malaysia and Vietnam. All face potentially very high tariffs currently put on a temporary hold by President Donald Trump.
Trade between the EU and China suffered after retaliatory tariffs were slapped on French cognac last year, hurting sales in the world’s No. 2 economy and a major brandy market for global companies including Hennessey, Remy Cointreau and Pernod Ricard.
German auto industry association VDA welcomes the talks between the EU and China, calling the duties a “mistake” and advocating for a negotiated solution.
“Regardless of current global developments, it must also be discussed here how to reduce obstacles and distortions in international trade, rather than building new hurdles,” VDA says.
