China, EU Reach Breakthrough to End EV Tariffs
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The European Union has issued new guidance that could allow Chinese electric-vehicle makers to replace anti-subsidy tariffs with minimum price commitments, marking a major step toward resolving a trade dispute with Beijing that began in late 2023.
On Monday, the European Commission issued guidance on the submission of price undertaking offers by Chinese exporters of battery-electric vehicles (BEVs). The offers should include minimum import prices that “must be set at a level appropriate to remove the injurious effects of the subsidisation,” along with annual volume caps and other details, according to the document. If accepted, the undertakings would replace the anti-subsidy duties currently in place.
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- The EU issued guidance allowing Chinese EV makers to replace anti-subsidy tariffs (7.8–35.3% since Oct 2024) with minimum price commitments, following a 2023 anti-subsidy probe.
- This move marks progress in EU-China negotiations, with final approval pending company-specific quotas and price plans.
- Despite trade barriers, China exported 1.21 million vehicles to the EU in Jan–Nov 2025, up 35% year-on-year; pure EV exports rose 15% to 580,000 units.
- Volkswagen AG
- Volkswagen AG (大众汽车集团) had a Chinese subsidiary that sought to use price undertaking mechanisms to replace countervailing tariffs imposed by the EU on Chinese electric vehicles. This proposal was reviewed by the EU in December last year, signaling a potential path for resolving the trade dispute.
- October 2023：
- The European Commission formally launched an anti-subsidy investigation into imports of battery-electric vehicles (BEVs) from China.
- October 2024：
- Five-year countervailing duties on Chinese BEVs, ranging from 7.8 to 35.3%, took effect.
- By November 2025：
- China exported 1.21 million vehicles to the EU, a 35% year-on-year increase, with pure electric vehicle exports growing 15% to 580,000 units in the first 11 months of 2025.
- December 2025：
- The EU announced it would review a price undertaking from a Chinese subsidiary of Germany’s Volkswagen AG seeking to use the mechanism to replace countervailing tariffs.
- January 12, 2026：
- The European Commission issued guidance on submission of price undertaking offers by Chinese BEV exporters, accepting the framework of replacing anti-subsidy tariffs with minimum price commitments.
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