China’s Ministry of Commerce of the People’s Republic of China has indicated that electric vehicle manufacturers affected by European Union tariffs may be granted greater freedom to negotiate individual arrangements with Brussels, potentially paving the way for additional company-specific deals.
The shift follows a recent agreement between the European Commission and Cupra, a subsidiary of Volkswagen, covering imports of the Cupra Tavascan electric SUV produced in China. Under the terms, the automaker secured relief from punitive tariffs in exchange for minimum pricing commitments, import quotas, reporting obligations, and investment pledges related to battery-electric vehicles within the EU.
Initially, Beijing had opposed company-by-company arrangements, preferring a uniform resolution to the trade dispute. However, a ministry spokesperson said authorities now hope more manufacturers will reach minimum-price agreements with the Commission while maintaining broader dialogue with the EU.
The tariffs stem from a 2024 investigation into state support for China’s electric vehicle industry. Depending on the assessed level of subsidies, anti-dumping duties of up to 35.3% can be imposed on top of the EU’s standard 10% import tariff for vehicles produced in China.
These measures affect not only Chinese brands but also foreign automakers manufacturing EVs in the country for export to Europe. Among them are BMW, which previously built the iX3 in Shenyang, the Smart joint venture between Geely and Mercedes-Benz, and Polestar vehicles assembled in China.
Volkswagen’s Chinese operations also play a role through Volkswagen Anhui, which produces the Tavascan for export. Analysts say the Cupra deal could serve as a template for other manufacturers seeking to maintain European market access without absorbing steep tariffs.
At the same time, several automakers are pursuing legal challenges. Companies including BMW have filed complaints with the European Court of Justice, arguing that the tariffs are unjustified and distort competition.
The evolving stance from Beijing suggests a dual strategy: continuing negotiations with the EU while allowing companies to secure interim arrangements to mitigate commercial disruption. Industry observers say the outcome will shape trade flows, investment decisions, and pricing in Europe’s rapidly expanding electric vehicle market.
Source: Reuters