China files WTO complaint against EU after Türkiye over electric vehicle tariffs

China’s Ministry of Commerce announced Thursday that it has lodged a complaint with the World Trade Organization (WTO) against the European Union over the bloc’s tariffs on Chinese electric vehicles (EVs).

This action follows the EU’s recent decision to apply countervailing duties on EVs imported from China, which could reach up to 35.3%. The ministry stated that the complaint was filed to protect the interests of China’s electric vehicle industry and to promote global cooperation on green energy transitions.

China cites ‘protectionist’ measures

Chinese officials expressed disappointment over what they described as “protectionist” measures. Despite objections from industry representatives, public commentators, and EU member state governments, the EU proceeded with its decision.

“We are saddened to see the EU impose high countervailing duties on Chinese electric vehicles,” the ministry’s statement read.

Previously, China had already brought the EU’s preliminary countervailing measures on electric vehicles to the WTO. We regret to see that, despite the large number of objections raised by all parties concerned, including the governments of EU member states, the industry and the public, the European side still issued the relevant final ruling measures and imposed high countervailing duties on Chinese electric vehicles.

China firmly opposes this. In order to safeguard the interests of the development of the electric vehicle industry and the global cooperation on green transformation, China has decided to file a lawsuit against the EU’s final countervailing measures.

China’s Ministry of Commerce

Background on EU’s tariff decision

The EU’s final ruling on the tariffs, published last week, aimed to mitigate what it claims are unfair subsidies provided by the Chinese government to its domestic EV manufacturers, which the EU argues distort market competition.

China is of the view that the EU’s final countervailing duty measure lacks factual and legal basis, violates WTO rules, is an abuse of trade remedy measures, and is trade protectionism in the name of countervailing duty.

We urge the European side to face up to its own mistakes, immediately rectify its irregularities, and jointly safeguard the stability of the global electric vehicle industry chain supply chain as well as the overall situation of China-EU economic and trade cooperation.

China’s Ministry of Commerce

China’s parallel actions against Türkiye

In addition to the EU case, China has also taken steps against Türkiye at the WTO. In October, China’s Ministry of Commerce formally requested consultations with Türkiye regarding new customs duties and import licensing measures that Türkiye imposed on plug-in hybrid vehicles.

Chinese officials accused Türkiye of discriminatory practices and alleged that these actions breached WTO rules. Earlier this year, Türkiye expanded strict import conditions to include hybrid commercial vehicles, following the imposition of extra tariffs on fuel-powered and hybrid vehicles in June.

Details of China’s complaint against Türkiye

In June, Türkiye introduced a 40% additional customs duty on all vehicles imported from China.

This measure was later expanded in September to include plug-in hybrid vehicles. China’s Ministry of Commerce has characterized these tariffs as discriminatory and a violation of WTO rules, labeling them as typical protectionist measures.

Why it matters?

This situation highlights the increasing tensions in global trade dynamics, particularly as countries navigate protectionist policies amid competitive pressures in the automotive industry. The outcome of this dispute could have broader implications for international trade relationships and market stability.

Additionally, it is crucial to consider the impact of Chinese automotive companies’ investments in Türkiye. Recently, a significant agreement was signed between the Chinese automotive giant BYD and Türkiye’s Ministry of Industry and Technology, foreseeing investments worth approximately $1 billion in the country.

Furthermore, another major Chinese automotive manufacturer, Chery, is preparing to invest in Türkiye. Such investments are vital not only for the Turkish economy but also for the overall stability of international trade relations in the automotive sector.

Expert analysis of China’s complaint

Sahin Yaman, a former WTO negotiator, provided insights into the situation, highlighting several key points:

• Ineffectiveness of WTO mechanisms: Yaman noted that the WTO’s Appellate Body has become largely ineffective, making it unlikely that significant results will come from this process.
• China’s strategic intent: He interprets China’s complaint as an effort to obtain a legitimate legal ruling from the WTO’s first-instance court, aiming to challenge Türkiye’s actions.
• Impact on local industry: Yaman emphasized that Türkiye’s protective measures may not effectively support domestic production. Instead, they could enhance the profitability of European manufacturers by limiting competition from Chinese imports.