Beijing has welcomed a move by the European Commission that offers guidance to Chinese electric vehicle (EV) manufacturers to avoid steep EU tariffs. The decision signals a possible easing of long-standing trade tensions between China and the European Union.
The guidance, published Monday, encourages Chinese EV makers to sell exported vehicles at or above a minimum price. This measure allows them to bypass EU duties of up to 35.3%, which were imposed in October 2024 following a lengthy anti-subsidy investigation.
China and Germany have strongly opposed the tariffs, as German automakers rely heavily on Chinese demand. China remains the world’s largest EV producer and exporter, making the EU tariffs a significant concern for global trade.
China’s commerce ministry said the guidance “is not only conducive to the healthy development of China-EU economic and trade relations, but also conducive to maintaining a rules-based international trade order.”
The China Chamber of Commerce to the European Union (CCCEU), representing over a thousand Chinese firms in Europe, also praised the move. “This constructive outcome will significantly boost market confidence, provide a more stable and predictable environment for Chinese electric vehicle manufacturers, and related supply-chain companies operating in Europe,” the CCCEU said.
The Commission emphasized that the “price undertaking” must offset any alleged subsidies provided to Chinese EV makers. Brussels noted that the agreements should mirror the effect of tariffs, be workable in practice, prevent companies from offsetting losses elsewhere, and align with broader EU policy goals.
Despite the positive reception in Beijing, the Commission stressed that the guidance does not remove EU tariffs. Speaking to reporters, spokesperson Olof Gill said, “Let’s just all calm down a bit. It’s guidance at this stage, nothing more.”
The EU has faced criticism for imposing tariffs while simultaneously relying on Chinese EVs for market stability and supply chains. Analysts say the guidance is a compromise designed to prevent disruption while the Commission continues its investigation into subsidies.
The move comes amid broader tensions between Brussels and Beijing, including disputes over China’s trade surplus, export controls on critical minerals, and its alignment with Russia since 2022. Observers say the guidance signals a willingness on both sides to reduce friction and maintain economic cooperation.
By allowing Chinese EV manufacturers to adjust pricing, Brussels aims to maintain fair competition while avoiding unnecessary escalation. Chinese firms say this will improve predictability in their operations and help stabilize Europe’s EV market.
The EU-China relationship remains delicate, with trade, technology, and geopolitical issues intertwined. The new guidance could serve as a blueprint for managing future conflicts while promoting cooperation in critical industries such as electric vehicles.
For now, Chinese EV exporters have a clear signal from Brussels that compliance with minimum price agreements may help them continue operations in Europe without facing punitive tariffs. Market watchers say this could restore investor confidence and encourage further collaboration between EU and Chinese firms.
The development highlights how international trade regulations and strategic economic decisions are closely linked, with both Brussels and Beijing seeking solutions that protect domestic interests while avoiding long-term trade disputes.
