The European Union has opened the door to a potential compromise in its escalating trade dispute with China over electric vehicles, offering an alternative to the steep tariffs imposed on Chinese-made EVs entering the bloc.
In a newly released document, the European Commission — which oversees the EU’s trade policy — outlined a framework under which Chinese electric vehicle manufacturers could avoid punitive duties by agreeing to “price undertakings.” These undertakings would establish minimum import prices designed to neutralise the impact of state subsidies that the EU says have unfairly undercut European automakers.
In 2024, the EU imposed tariffs of up to 35.3 percent on electric vehicles imported from China following an anti-subsidy investigation that concluded Chinese government support gave its manufacturers an unfair competitive advantage in the European market.
However, the Commission stressed that any price undertaking must be sufficiently robust. According to the document, such offers must “eliminate the injurious effects of the subsidies” and deliver an outcome equivalent to the existing duties.
The guidance, EU trade spokesman Olof Gill explained, is intended to assist Chinese exporters currently subject to countervailing duties who may wish to submit acceptable price undertaking proposals for electric vehicles.
China Welcomes Dialogue
China’s Ministry of Commerce welcomed the EU’s move, describing it as a positive step that reflects the spirit of dialogue and consultation between both sides.
“The progress fully reflects the outcomes of consultations between China and the European Union,” the ministry said in a statement. “It is conducive to ensuring the healthy development of China–EU economic and trade relations and safeguarding the rules-based international trading system.”
Echoing that sentiment, the Chinese Chamber of Commerce to the EU praised the development, saying it “highly commends the positive outcome achieved through dialogue and consultations.”
The chamber added that the move has created “a soft landing” for the electric vehicle dispute, raising hopes that both sides could de-escalate tensions while preserving fair competition in the rapidly expanding global EV market.
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