China Launches WTO Lawsuit Against EU

China has initiated legal proceedings with the World Trade Organization (WTO) in response to new tariffs imposed by the European Union (EU) on electric vehicles (EVs) produced in China.

This development follows the EU's recent decision to implement tariffs ranging from 8% to 35% on imports of Chinese EVs for a period of five years, marking the culmination of a year-long investigation by Brussels into alleged unfair subsidization by China.

The Chinese Ministry of Commerce expressed strong opposition to the EU's ruling, stating that it aims to protect the interests of China’s electric vehicle industry and promote global green transformation cooperation.

In a statement released on Monday, the ministry condemned the EU's decision as lacking both factual and legal foundations and characterized it as a form of trade protectionism disguised as countervailing duties.

Despite widespread objections from various stakeholders, including EU member state governments and industry representatives, the EU maintains that these tariffs are essential to shield European car manufacturers from what it describes as unfair competition stemming from state subsidies enjoyed by Chinese manufacturers.

Notably, some EU member countries, such as Germany and Hungary, have voiced significant opposition to the tariff implementation.

The EU serves as the largest international market for Chinese electric vehicle manufacturers, with imports surging from $1.6 billion in 2020 to about $11.5 billion in 2023, representing 37% of all EV imports to the bloc.

China has warned that continued escalation could lead to a "trade war" between the two economies.

In retaliation, the Chinese government has previously imposed provisional tariffs on EU brandy and initiated an anti-dumping investigation regarding certain pork and dairy products.

This lawsuit follows the United States' decision to raise tariffs on Chinese electric vehicles from 25% to 100% in May, reflecting growing global tensions surrounding trade policies in the EV sector.