EU's unilateral plan raises concerns; Beijing announces dairy import probe

The European Union's plan to impose definitive countervailing duties on imports of electric vehicles from China is likely to weaken Chinese investors' confidence in Europe and hinder the growth of the global green industry, said market watchers and industry leaders on Wednesday.

The European Commission, the EU's executive arm, said on Tuesday that it plans to impose import tariffs of up to 36.3 percent on EVs produced in China, and that any potential measures would be in force for five years. A final decision is pending.

Following the EU's move, China's Ministry of Commerce vowed to take all necessary measures to defend the legitimate rights and interests of Chinese companies.

In addition, to safeguard the interests of China's dairy businesses, the ministry announced on Wednesday that China will launch an anti-subsidy probe into certain dairy products imported from EU member states.

The ministry will review the applicants' qualifications, details regarding the products under investigation, the impact of these products on the domestic industry, and pertinent information about the involved countries or regions.

The EV tariffs decision was based on facts determined unilaterally by the EU, rather than mutually recognized facts, and China firmly opposes it and is deeply concerned about the move, the Commerce Ministry said in an online statement late Tuesday.

Since the end of June, China and the EU have conducted more than 10 rounds of technical consultations on the EV issue, according to the ministry.

Zhang Xiang, an auto industry researcher at Beijing-based North China University of Technology, said the release of the definitive findings underscores the EU's clear bias against Chinese EVs, further complicating the ongoing talks.

Similar views were expressed by Sun Xiaohong, secretary-general of the automotive branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, or the CCCME.

The European Commission "has largely maintained the originally proposed import duties on Chinese automakers, despite extensive efforts by the Chinese government, industry associations and manufacturers to communicate and coordinate since early July", said Sun.

Shi Yonghong, vice-president of the CCCME, said that even though many European countries such as Spain, France, Italy and Poland are eager to attract Chinese investment, the EU's decision will raise concerns among Chinese investors about the market and policy environment in the EU.

This could affect Chinese companies' future direct investment in Europe, especially that of companies in the EV, power battery and auto parts industries, he said.

Bai Ming, a member of the Academic Degree Committee at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said, "If a win-win situation cannot be achieved, Chinese companies are likely to avoid the European market and seek new opportunities elsewhere."

Chinese automaker BYD, rather than investing elsewhere in Europe this year, will invest around $1 billion to build a plant in Turkiye, according to information released by the Turkish Ministry of Industry and Technology in early July. The factory will have an annual capacity of 150,000 vehicles.

Turkiye's membership in the EU Customs Union will enable vehicles produced within its market to be exported to EU countries without incurring tariffs.

Maciej Mazur, president of the Brussels-based European Association for Electromobility, said in late July that the EU's planned tariffs on Chinese EVs will lead to an increase in European EV prices, hurting European consumers and car manufacturers, and will cause friction in China-EU business relations.