The EU said this week that it is considering setting minimum import prices for Chinese-made electric vehicles (EVs), a move that would replace the steep anti-subsidy tariffs currently in place. The proposal is widely seen as a signal of easing trade tensions between Europe and China, aiming to protect European automakers while allowing Chinese manufacturers to preserve reasonable profit margins. China’s Ministry of Commerce has welcomed the idea.
According to reports by Bloomberg and Nikkei Asia, the European Commission would determine minimum prices based on the level of subsidies received by Chinese manufacturers, setting thresholds high enough to neutralize any harm to the European industry. Chinese exporters would be allowed to submit price undertakings voluntarily, which the Commission would then assess against established criteria.
The EU Chamber of Commerce in China said the proposal could help advance bilateral trade and investment ties and send a broader signal that Beijing and Brussels are willing to resolve disputes through dialogue rather than escalation. European officials emphasized that all proposals would be reviewed objectively, fairly, and without discrimination, in line with World Trade Organization rules.
Trade relations over EVs have been strained since 2024, when the EU imposed anti-subsidy duties ranging from 7.8% to 35.3% on Chinese-made electric cars for five years, citing unfair government support. Beijing responded with countermeasures targeting European products, including dairy goods, pork, and brandy.
The tariffs, however, have also had unintended consequences for European automakers. Companies such as BMW and Volvo had relied on China as a manufacturing base for electric vehicles destined for Europe, attracted by mature supply chains and lower labor costs. The new duties have pushed some production back to Europe to mitigate tariff-related costs.
Despite the trade barriers, Chinese brands have continued to expand their presence in Europe. Models from SAIC Motor’s MG, BYD, and Leapmotor have steadily gained market share. Industry data show that Chinese-made vehicles accounted for about 6% of the EU’s auto market in the first half of 2025, up from 5% a year earlier. Some forecasts suggest the figure could reach 10% by 2030.
Currently, about 74% of vehicles sold in the EU are manufactured by European automakers, with roughly 20% produced in Germany, followed by Spain, the Czech Republic, and France.
As the US continues to press Europe to adopt a tougher stance toward China, the EU appears to be opting for a price-based mechanism to manage friction. Analysts say the success of the policy will depend on Brussels’ ability to strike a balance between safeguarding the domestic industry and preserving trade ties with China. Chinese automakers’ investment decisions in Europe are likely to serve as a key indicator of how the policy evolves.
Article edited by Jack Wu
