TMTPost -- A senior German official calls for solution to avoid trade conflict between the European Union and China as a critical vote that determines a five-year elevated tariffs on Chinese electric vehicles (EVs) looms.

Credit：Xinhua News Agency

Germany does not agree to impose tariffs on Chinese EVs, and will urge the European Commission to seek a proper solution with China to avoid trade conflicts  “at all costs “ , German Vice Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck told  Chinese Commerce Minister Wang Wentao in Berlin, according to a statement of the ministry.  "We absolutely want to avoid a trade conflict with spiralling tariffs that ultimately harms both sides," said Habeck, adding that his position is “we need a political solution.”

Habeck said while Germany embraces competition with China, “it must be on fair terms.”  He described the package solution proposed by the Chinese industry as an important step forward, laying a good foundation for the next round of EU-China consultations, and it is hopeful that the European Commission to a constructive response from the European Commission.

Wang said additional tariffs will seriously disrupt trade and investment cooperation and harm the interests of both sides as the Chinese and German automotive industries are deeply intertwined. The minister urged Berlin to push the European Commission to work with China to reach a solution that complies with World Trade Organization (WTO) rules as soon as possible to avoid escalating China-EU economic and trade frictions.

Wang and Habeck’s meeting came as the Chinese official visited Europe ahead of a make-or-break vote by the EU members to make extra EV tariffs permanent for five years. The Ministry of Commerce of China (MOFCOM) announced last week Wang is set to hold talks with the European Commission's Executive Vice President and Trade Commissioner Valdis Dombrovskis on September 19.

The European Commission disclosed last month its draft decision to impose definitive countervailing duties on imports of BEVs from China to interested parties.The Commission said it would make a slight adjustment of the proposed duty rates based on substantiated comments on the provisional measures, though it still believes Chinese EV production has been benefited from subsidies. The regulatory body proposed to add up to 36.7% to the current 10% duty faced by Chinese exporters, modestly lowered from the initial maximum planned duty of 37.6% set in the start of July. 

The EU remains open to reaching an effective solution with the Chinese authorities in a WTO-compatible manner, the European Commission said. According to the executive arm of the EU, EV companies subjected to proposed tariffs have ten days until August 30 to provide comments and request hearings. If a qualified EU majority votes in favor of the final regulation, the tariffs could become law by October 30 and remain in effect for five years, with the option extensions upon review.

The European Commission suggested, in a statement on July 4, the long-term definitive duties will be effective no later than four months ago, if approved by EU countries. All the provisional duties are applied for a maximum duration of four months starting from July 5. Within the four-month timeframe, a final decision must be taken on definitive duties, through a vote by EU member States, and when adopted, this decision would make the duties definitive for a period of five years, the Commission said.

The proposed final duties will be subject to a vote by the EU's 27 states. They will be implemented unless a qualified majority of 15 EU members representing 65% of the EU population vote against.