China and the EU agree on steps to resolve their dispute over EV imports

A Chinese paramilitary policeman stands guard at the entrance to the European Union Delegation to China compound in Beijing, China, on Oct. 14, 2023. (AP Photo/Ng Han Guan, File)

HONG KONG — China and the European Union said Monday they have agreed on steps toward resolving their dispute over the bloc’s imports of Chinese-made electric vehicles.

A “guidance document” released by the EU on Monday gives instructions for Chinese EV manufacturers on making price offers for EV exports, including minimum import prices and other details. The EU had imposed tariffs of up to 35.3% on Chinese EV imports in 2024 following an anti-subsidy investigation.

The EU said that wide variations in the types of vehicles made it necessary to set specific minimum import prices “appropriate to remove the injurious effects of the subsidization.” Chinese EV manufacturers’ plans for investments within the EU will also be considered, it said.

The EU said the European Commission would assess each offer in an “objective and fair manner, following the principle of non-discrimination” and in line with World Trade Organization rules.

“This is conducive not only to ensuring the healthy development of China-EU economic and trade relations, but also to safeguarding the rules-based international trade order,” a statement by China’s Commerce Ministry said.

The China Chamber of Commerce to the EU welcomed the move, which it said would bring about a “soft landing” in the EV standoff.

“The minimum prices offer Chinese brands probably some comfort to continue their exports long term ... while avoiding higher import tariffs,” said Rico Luman, a senior economist at the Dutch bank ING who focuses on transport, logistics and the automotive industry. “I’m convinced the inroads of Chinese brands will continue.”

EU manufacturers depend heavily on Chinese made batteries, rare earths materials and computer chips. That requires “a balancing act to avoid frustrating the trade relationship” with China, Luman said.

The expansion of Chinese EV makers overseas has alarmed automakers in Europe and the U.S. The EU imposed the tariffs to counter an influx of affordably priced Chinese EV models into its markets, saying Chinese automakers had benefited from unfair government subsidies. The U.S. enacted a 100% tariff on China-made electric cars in 2024.

The value of battery-powered cars imported by Europe skyrocketed from $1.6 billion in 2020 to $11.5 billion in 2023. Most of the imports were from Western automakers with factories in China, including Tesla and BMW.

EU officials complained that Chinese’s homegrown automakers were poised to gobble up market share by undercutting European car brands on price thanks to Beijing’s massive subsidies. Those include orders for government fleets, low-interest loans from state-owned banks, access to cheap land for factories, tax breaks, and subsidized raw materials and parts from state-owned industries.

The U.S. tariffs effectively block virtually all Chinese EV imports. But the EU needs affordable electric cars from abroad to achieve its goals of cutting greenhouse gas emissions by 55% by 2030.

Chinese car brands have been expanding into Europe despite the higher tariffs. China-manufactured cars rose to 6% of sales in the EU in the first half of 2025, according to the European Automobile Manufacturers’ Association (ACEA) and S&P Global Mobility, up from 5% in the same period of 2024.

EU-based manufacturers represented 74% of total EU car sales in the first half of 2025, the ACEA said. Germany still produced about 20% of cars sold in the EU, followed by Spain, Czechia and France.

By 2030, Chinese automakers are likely to double their European market share to about 10%, according the consultancy AlixPartners last year.

Chan Ho-him, The Associated Press