Chinese ministry says EU’s anti-subsidy EV probe made spy-like levels of ‘unreasonable demands’

Another day, another deeper understanding of the conversations going on behind closed doors as China and the EU approach the negotiating table as they toe the lines of a looming trade war surrounding vehicle imports and anti-subsidy probes of Chinese EVs.

June has been a noteworthy month for global EV market news, as nearly every day, we are delivered a new chapter in an ongoing saga of a looming trade war between China and the European Union.

The dispute between the two global markets began last fall when the EU Commission announced an anti-subsidy probe to determine if Chinese-made EVs imported into Europe were given an unfair advantage due to state-backed funds.

As part of the probe, the EU Commission requested information from several Chinese automakers selling their EVs in Europe, including names like NIO, BYD, XPeng, and state-owned SAIC. Even before the probe results were shared, the EU began threatening tariffs, after the US announced it would quadruple duties on Chinese imports from 25% to 100%.

In retaliation, China threatened tariffs on European imports up to 25%, particularly on gas vehicles from German automakers and other industries. Before sharing its results, the European Commission argued that three Chinese EV automakers, including SAIC, had yet to supply adequate information to the anti-subsidy probe and as a result, would face the highest tariffs (38.1%) on imports.

Across the world, China’s Ministry of Commerce is painting a different picture, calling the requested details of the EU’s anti-subsidy probe of Chinese EVs “unprecedented,” comparing the probe to espionage.

Chinese deem anti-subsidy EV questions spy-like

Per Reuters, China’s Ministry of Commerce has spoken out about the EU’s anti-subsidy probe on EV imports, calling the detailed information demanded from Chinese automakers “unprecedented.”

In a local news conference in China earlier today, Commerce Ministry spokesperson He Yadong said the EU Commission “mandatorily required” Chinese automakers to share advantageous information regarding sourcing raw materials for batteries, manufacturing components, developing sales channels, and their respective pricing.

When asked whether the EU Commission was using the anti-subsidy probe to spy on Chinese EV automakers, Yadong said the following:

The type, scope, and quantity of information collected by the European side was unprecedented and far more than what is required for a countervailing duties investigation.

State media CCTV is pushing a similar “spy” narrative against Brussels following an article posted Wednesday. During today’s news conference, Yadong also said that the EU’s claims that Chinese car companies like SAIC did not fully cooperate are “groundless.”

With Beijing working with European automakers to ease or stop the incoming EV tariffs and the Chinese state media accusing the EU Commission of spying, we appear to have moved beyond brinkmanship and into a potential trade war.

In addition to its own threatened tariffs on EU vehicles imported into China, Beijing has also launched a dumping investigation into EU pork imports, further raising tensions. Meanwhile, Chinese EV automakers who obliged the anti-subsidy EV probe have spoken out against the tariffs but are not wavering on their expansions in the EU markets, no matter what.

Companies like NIO have expressed confidence that they will continue to expand and sell well in Europe, whether they pay duties on each EV import or not.

The EU’s tariffs are expected to take effect on July 4, 2024. This story remains ongoing.