1:08 pm, January 13, 2026
The European Union has set out a potential route for Chinese carmakers to avoid punitive import tariffs, provided they agree and stick to strict pricing commitments.
Under guidance published on Monday, the EU said tariffs of up to 35.3% imposed on China-based EV carmakers could be replaced with legally binding agreements to sell vehicles in the EU at minimum prices.
Brussels would also consider and factor in Chinese investment in European manufacturing when assessing the proposals, reported Reuters.
The tariffs have become a serious source of tension in trade relations between Brussels and Beijing, with China arguing they unfairly penalise its fast-growing EV sector.
The EU, however, says the measures are necessary to protect Europe’s car industry from a surge of lower-cost imports from manufacturers such as BYD, SAIC and Geely, which it claims benefit from extensive state support.
China has been pushing for minimum prices that centred around a single, broadly applicable price.
But the guidance requires model- and configuration-specific pricing, based on the final sale price to the first independent customer within the EU. It’s thought that this would prevent manufacturers undercutting rivals through discounting.
The latest moves follow the launch of a formal review into a proposal by Volkswagen to replace tariffs with a minimum price and import quota for the Cupra Tavascan, which is produced in China.
The guidance has been broadly welcome by China’s commerce ministry, saying the Commission’s emphasis on non-discrimination and objective assessment showed that trade disputes could still be resolved through negotiation.
