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according to cctv news, on october 4, local time, the european union held a vote on whether to impose a five-year countervailing duty on chinese electric vehicles. a statement released by the european commission showed that the european commission's proposal to impose tariffs on imported pure electric vehicles from china received the necessary support from eu member states during the vote.

in october 2023, the eu launched a countervailing investigation into chinese electric vehicles. this investigation was initiated by the european commission without any complaint from the eu industry, which is rare. in june this year, the european commission released its preliminary ruling on the anti-subsidy investigation into china's electric vehicles and proposed to impose temporary countervailing duties on electric vehicles imported from china, with tax rates ranging from 17.4% to 38.1%. then in july, eu member states held an informal vote on the tariff increase bill.

there are differences among eu member states regarding the taxation of chinese electric vehicles, especially germany and france, which hold opposite views. on the eve of the vote, german chancellor scholz expressed his hope to negotiate with china to resolve the eu's temporary countervailing duties on chinese electric vehicles. french president macron reiterated his support for additional tariffs on chinese electric vehicles in berlin.

in fact, before the vote, china and the eu conducted intensive consultations on the electric vehicle countervailing case, and chinese electric vehicle companies and industry associations proposed a price commitment plan for the eu anti-subsidy investigation, but the european commission rejected this on september 12 , china’s ministry of commerce was “deeply disappointed”. according to the ministry of commerce, on september 19, local time, chinese minister of commerce wang wentao met with european commission executive vice president and trade commissioner dombrovskis at the eu headquarters to conduct a comprehensive and comprehensive review of the eu's anti-subsidy case against china's electric vehicles. in-depth and constructive consultations. the two sides clearly expressed their political will to resolve differences through consultation, agreed to continue promoting negotiations on the price commitment agreement, and were fully committed to reaching a solution acceptable to both parties through friendly dialogue and consultation.

foreign ministry spokesperson lin jian also previously expressed in response to relevant questions that he hopes the european side will show sincerity and action and seriously consider the reasonable concerns and suggestions of the chinese industry. if the european commission insists on having its own way, china will take necessary measures to resolutely defend the legitimate rights and interests of chinese companies and industries.

reuters reported on september 30 that a senior eu official said that even after the proposed tariffs on chinese electric vehicles were imposed, the european commission was still willing to continue negotiations with china to reach a potential agreement to avoid such tariffs. some people familiar with the matter also said that the eu is working on adding a clause to the draft legislation to allow negotiations to continue after the vote.

recently, regarding the negotiations between china and europe on electric vehicles, holger görg, director of the international trade and investment research center of the kiel institute of world economics in germany, pointed out in an exclusive interview with the paper (www.thepaper.cn) that european cars the industry has been protected for a long time and lacks competition. the imposition of tariffs will only lead to an increase in the price of electric vehicles and will not benefit local european car manufacturers. in response to this dispute, the price commitment agreement is a feasible solution. if china and the eu continue to take countermeasures on this matter, it may further evolve into a potential so-called "trade war", and the cost will be huge for both parties.

there are differences between eu member states and within countries

the paper: eu member states have been divided over whether to impose additional tariffs on chinese electric vehicles. what factors influence the european commission’s decision?

gerke: i think there are two important factors affecting eu decision-making: one is the negotiation with china; the other is the differences among eu member states. in particular, germany has a complicated attitude on this issue. the german government and industry have different views on trade protection and negotiations with china. the german government may be more supportive of imposing tariffs for trade protection, while the industry is conducting a large amount of trade with china and hopes to maintain good relations with china to promote trade and investment. in contrast, some countries such as france support high tariffs, but in fact the final decision will be made by the european commission.

the paper: germany is considered one of the countries most opposed to imposing tariffs on chinese electric vehicles, but the social democratic party, green party and free democratic party have different opinions on how to deal with china. it is reported that germany abstained from voting in the so-called "advisory" vote in july. what do you think of the reasons for abstention?

gerke: on the one hand, the german industry has expressed strong opposition to the imposition of tariffs and has lobbied vigorously. the opposition from enterprises has made it difficult for the government to vote in support. from a political perspective, the social democratic party is more concerned about employment issues and hopes to create more jobs in germany. however, china's electric vehicle exports are seen as impacting the local automobile manufacturing industry and thus affecting employment, so they are supportive of tariffs. the internal divisions reflect the complex balancing of trade and economic interests in germany's governing coalition.

the paper: regarding electric vehicles, can you introduce the situation of consumers, industries and policymakers in germany?

gerke: demand for electric vehicles has dropped significantly in germany and europe in recent years. there are many reasons for this, such as imperfect charging networks and the discontinuation of germany's subsidy policy for electric vehicles, which has caused electric vehicles to become more expensive, thus affecting demand. but now that the world is committed to reducing emissions, the key to achieving climate goals is to shift the transportation system from internal combustion vehicles to electric vehicles, but there are now challenges in achieving this transition. in europe, chinese electric vehicles are among the most affordable. raising the price of these electric vehicles will suppress demand, make consumers reluctant to buy, and make the transformation of the transportation system more costly and slower, affecting europe's ability to achieve climate goals. it’s also about global climate governance.

at the same time, the german automotive industry has also been experiencing falling demand, with gasoline and diesel prices rising due to multiple crises over the past few years, and internal combustion vehicles underperforming. german automakers are in dire straits and they are not performing as well as they should. it is also important for them to keep their markets open and able to export and produce in other countries.

the paper: according to eu regulations, among the 27 member states, 15 countries accounting for more than 65% of the total population must vote against to prevent additional tariffs. but history has rarely seen proposals pass without a vote, so why is it so difficult to prevent eu-level decisions?

gerke: legally and theoretically, blocking is possible, but i don't think it's realistic. this reflects the eu's philosophy of overcoming individual national interests and pursuing broader eu interests. the european commission takes all factors into consideration when making decisions, and member states joining the union mean sometimes having to compromise rather than just pursue their own national interests.

the paper: the european commission previously rejected the price commitment plan proposed by chinese electric vehicle manufacturers. after chinese minister of commerce wang wentao met with european commission executive vice president and trade commissioner dombrovskis at the eu headquarters on september 19, china and the eu agreed to continue to promote negotiations on the electric vehicle price commitment agreement. do you think entering into a price commitment agreement is a better solution?

gerke: the main problem now is that the eu is worried that chinese companies will sell electric vehicles at below-market prices because they receive subsidies. if this is the core issue, then a price commitment may be a straightforward way to resolve the issue and both parties will need to have a transparent discussion. but this price must also take into account the cost advantages of chinese manufacturers. it is possible to reach an agreement through negotiations, but if the eu imposes tariffs as punishment, it may lead to china taking countermeasures, which is not in the interests of both parties. no one wants the interests of consumers on both sides to be harmed. therefore, price commitment agreements are a viable solution.

taxing chinese evs won't help european carmakers

the paper: when the eu imposes high tariffs on electric vehicles imported from china, what impact will this have on the eu’s electric vehicle industry?

gerke: i don’t think it will have a positive impact on the european electric vehicle industry. the european automobile industry has long been protected from competition, and competition helps create impetus for innovation. in fact, the german industry has realized the problem of lack of innovation, especially in the field of electric vehicles. the imposition of additional tariffs will only lead to an increase in the price of electric vehicles, which will not benefit local european automakers and will also damage the competitive image of the eu auto industry.

the paper: there are reports that many chinese car companies plan to build factories in europe to avoid additional tariffs. what do you think of this solution?

gerke: i think it's a way around the tariff issue. from a historical perspective, there were also high tariff barriers in the 1980s. at that time, many japanese companies chose to build factories in europe and achieved success. likewise, german carmakers are setting up factories in china, partly to be closer to consumers but also to avoid trade costs. therefore, even without tariffs, i expect more chinese automakers to set up factories in europe in the future. tariffs may speed up that process, which i think is good for consumers.

the paper: if this is good for consumers, is it also good for the development of the industry?

gerke: of course, competition will increase, but only if german or european companies also pursue such a strategy in china. many european companies want to enter the chinese market. if there is this two-way open exchange between european and chinese companies, increased competition is normal and what we would expect. at the same time, german carmakers need to adapt themselves faster to stay competitive.

the paper: an objective fact is that some western electric car manufacturers also rely on some raw materials produced in china. is this an important factor for eu policymakers to consider in the long term?

gerke: yes, the eu has developed a strategy on key raw materials, and it is very important to maintain good relations with china to obtain these materials. the eu is aware of china's important role in this regard, and i hope that both parties can take these factors into consideration when making current negotiations and decisions.

the eu is very independent in handling economic and trade relations with china

the paper: in 2012, the eu launched anti-subsidy and anti-dumping investigations into chinese photovoltaic products. at that time, china-eu economic and trade relations experienced a major turning point. however, through communication and negotiation, the dispute was resolved, laying the foundation for further cooperation. if we look at it from a positive perspective, could this tariff dispute be an opportunity for china and the eu to strengthen communication and cooperation?

gerke: i think there is a possibility that the two are very similar situations. the dispute settlement in 2012 is a good example. the two sides resolved the dispute through dialogue and did not take punitive measures. this tariff dispute should be resolved in a similar way to promote further cooperation in the economic and trade field.

the paper: compared with 2012, we are in a different environment now. since 2019, the eu has regarded china as a "partner, competitor and institutional rival". in the context of the eu's changing position on china, what challenges and opportunities are faced in resolving current disputes?

gerke: the geopolitical situation has changed. over the past few years, european officials have had to navigate between china and the united states, not just on trade but also on geopolitics. the basic idea of ​​collaboration remains, but it is more difficult to promote than a decade ago.

the paper: some analysts pointed out that the united states and europe have adopted different stances on china’s electric vehicle policies. the united states has taken a tough stance, while europe has been more cautious, trying to find a balance between competition and cooperation. what do you think about this?

gerke: i totally agree with that. i think the stance taken by the united states on relations with china is controversial. it is clear that the united states wants to reduce trade and investment relations with china and is taking all measures to achieve this goal. this position does not depend on the current us president or the democratic administration, but rather both parties have more or less the same agenda.

the eu's position differs from that of the united states. the eu believes that cooperation with china, an important economic partner, is beneficial to both parties. however, due to the current tensions, the eu is also concerned about national security issues, as well as a range of issues from a purely economic perspective. for example, during the covid-19 epidemic, too close relations with one country may have negative effects. if there are problems in important economies like the eu or china, the entire world economy will be affected. therefore, the eu also takes this into consideration when re-adjusting its relationship with china.

the paper: you mentioned the eu’s concern about national security issues. the u.s. government earlier this year launched an investigation into electric vehicles made in china “as a threat to national security.” do you think competition in the electric vehicle space is really about national security?

gerke: i don't think so. national security concerns may be overblown. of course, national security interests are obviously important when it comes to investment and trade in certain important national resources, such as energy, data technology, and even military technology. but i also think that the use of the concept of national security to explain certain issues is overdone, and that it is now used to justify many interventions. let’s be honest, the discussion about electric cars in europe has nothing to do with national security and everything to do with unfair competition.

the paper: the european union launched a countervailing investigation against chinese electric vehicles on the grounds of "unfair competition." however, china has repeatedly pointed out that the eu’s anti-subsidy investigation into china’s electric vehicles has preset conclusions and that its practices in all aspects of the investigation violate its commitment to the principles of “objectivity, fairness, non-discrimination and transparency”. so, how do we define what is called unfair competition?

gerke: i think what is really needed is an international arbitration party, or a third party. this is a case that should be brought to the world trade organization, and then the issue should be studied from both the legal and economic perspectives, evidence collected from both sides, and then a decision made.

the paper: to what extent will the united states’ claims affect the eu’s decision-making on electric vehicle tariffs?

gerke: i don't think that's a problem at all. of course, the eu and the united states have close relations, and the eu will certainly take advice from the united states. but i think the eu made independent decisions on this matter, otherwise the eu would have implemented tariffs immediately. moreover, if we compare the scale of tariffs imposed, the eu is not talking about tariffs as high as 100% like the united states. the united states' approach is more radical.

the cost of the "trade war" is huge for both sides

the paper: will the electric vehicle dispute between china and europe extend to other areas of economic and trade relations between the two sides? how do we prevent similar disputes from happening again?

gerke: if the eu imposes tariffs on chinese electric vehicles, china may take corresponding measures, and then the eu may respond again, which could easily lead to a situation similar to the sino-us trade dispute. in addition to the costs and negative impacts of the tariffs themselves on the european and chinese economies, they may further evolve into a potential so-called "trade war." the costs of this "trade war" are huge for both sides. finding a solution is key, but if a solution cannot be reached, at least both parties need to remain calm and rational.

the paper: what impact will political factors have on china-eu economic and trade relations?

gerke: the u.s. election is coming, and people are worried about big changes, especially in the economic and trade areas, because we went through the trade difficulties during the trump era. but i don't think the u.s. position will change much depending on who wins the next election. of course, the political speech and style of us presidential candidate trump will be very different from harris. but i think the substance on trade and protectionism is similar, there may be some minor changes, but i don't think either man will back down on a tough stance on china.

the paper: as a senior researcher who has been engaged in international trade and investment for a long time, how do you view the changes and trends in global trade in recent years?

gerke: first, globalization has suffered setbacks. although global trade and investment levels are on an upward trend, they have become more unstable. the financial crisis, the covid-19 epidemic, and the russia-ukraine conflict have all caused fluctuations in trade volume. in addition, we can see the distribution of trade diversification. for example, the united states has obviously significantly reduced its imports from china. instead, it has increased imports from mexico, vietnam and other places, and also trades with china through indirect channels. this is not necessarily entirely due to political tensions, but rather a recognition that trade and investment with a single location and market is risky after the pandemic.

globalization will continue, albeit with some trade protection measures, and global investment is at a very high level. in the next three years, service trade will be a trade model that achieves substantial growth.