EU Confident in Investigation of Chinese EV Subsidies

BRUSSELS (Reuters) – The European Commission is confident that its investigation into state subsidies for Chinese electric vehicles (EVs) complies with World Trade Organization (WTO) rules. The EU will maintain its probe into the matter.

In July, the European Union imposed provisional tariffs as high as 37.6% on Chinese EV imports to protect its domestic production, following findings that the vehicles were subsidized by China.

In response, China requested a WTO consultation, asserting that the EU’s investigation and tariffs are unfounded and violate global trade rules.

The European Commission, responsible for trade issues in the 27-nation bloc, is reviewing Beijing’s WTO request and will respond according to procedures. A Commission spokesperson expressed confidence in the compliance of the investigation with WTO rules, emphasizing that China’s consultation request will not alter the timeline of the anti-subsidy inquiry.

While WTO cases can be lengthy, the current situation is complicated by the absence of a fully functioning Appellate Body, which has been stalled since 2019. Nonetheless, the EU and China can utilize a Multi-Party Interim Appeal Arbitration Arrangement (MPIA) for dispute resolution during this blockage.