China holds last ditch talks with EU over EV tariffs

China’s lead trade official is in Europe on a last-ditch mission to avert looming tariffs on electric cars ahead of a deadline that’s only days away.

Commerce Minister Wang Wentao is meeting his European Union counterpart Valdis Dombrovskis on Sept. 19, following on from talks with carmakers in Brussels. The EU was planning to vote Sept. 25 on whether to impose the tariffs, though that date could slip slightly.

Wang is on a whirlwind tour of Europe, trying to convince enough nations to vote against the tariffs by visiting Germany, Italy, and now Belgium, where the EU is headquartered. The EU has proposed imposing tariffs on China-made EVs of up to nearly 50 percent.

The vote later this month would pave the way for the duties to kick in from November for five years unless a qualified majority — 15 member states representing 65% of the the bloc’s population — opposes the move. The EU has repeatedly said that any solution needs to be in line with World Trade Organization rules and address the impact of China’s subsidies.

At stake for the EU are the tens of thousands of jobs and economic output from the auto and supplier industry that’s facing a profound impact from electrification. Tariffs may give European carmakers some breathing space from Chinese competitors ramping up a global expansion.

And for China, Europe is one of the most lucrative markets for its EV exports. Relatively unencumbered access will help Chinese manufacturers lift margins that have been eroded by a fierce competition at home. Around the talks, China is offering both a carrot of increased investment into car plants — in countries like Spain and Hungary — as well as wielding the stick of threatening tariffs on dairy, brandy and other products.