EU issues guidance to China exporters on electric vehicle prices as tariff alternatives

BRUSSELS, Jan 12 (KUNA) -- European Commission spokesman for trade Olof Gill said Monday the Commission has issued a guidance document aimed at providing direction to Chinese exporters who may wish to submit price undertakings for electric vehicles "currently subject to countervailing duties" in the European Union.
Gill told reporters that the guidance comes as part of an offer made by the EU to China as an alternative to the tariffs imposed on Chinese electric vehicles, amid a trade dispute related to government subsidies and their impact on the European automotive industry.
The European Commission explained in the document that price undertakings are based on setting a minimum import price by exporters, which offsets the effect of subsidies and provides an equivalent effect to the imposed tariffs.
In 2024, the European Union imposed tariffs of up to 35.3 percent on electric vehicles imported from China, following an investigation conducted by the European Commission that concluded that official Chinese support for the electric vehicle sector contributed to lowering prices, thereby harming European manufacturers.
The document stressed that any such offer "must be sufficient to eliminate the injurious effects of the subsidies and provide an effect equivalent to the tariffs." In a related context, the European Commission clarified that it has set the conditions under which electric vehicle manufacturers in China may replace tariffs with commitments to sell at minimum prices that cannot be undercut, stressing that it will take into account Chinese investments in the automotive sector within EU member states.
The guidance noted that accepting similar undertakings from companies selling other types of vehicles, such as hybrid cars, would be more difficult due to the risk of "cross-compensation," pointing out that imports of Chinese hybrid vehicles into the EU increased fivefold during the first nine months of 2025 compared to the same period a year earlier.
It added that these risks could be lower if the offers included commitments on sales volumes or were limited to a specific time period.
In this context, the European Commission began last month a review of an offer submitted by German automaker Volkswagen to replace tariffs with a minimum price and a specific import quota for the Cupra Tavascan electric vehicle, which is manufactured in China.
For its part, Chinaآ’s Ministry of Commerce broadly welcomed the European guidance, saying that the EUآ’s adherence to the principle of non-discrimination and objective assessment "demonstrates the ability of both sides to resolve differences through dialogue." (end) arn.mt