China’s Ministry of Commerce alleges the European Union is applying its foreign subsidy rules unfairly.
China accuses the EU of erecting unfair trade barriers against its companies, escalating trade tensions between the two economic powers.
A statement released Thursday by the Chinese Commerce Ministry claims the EU’s foreign subsidy investigations targeting Chinese firms create obstacles to trade and investment.
This follows a Chinese investigation launched in July 2023, responding to EU probes into potential anti-competitive Chinese government subsidies for electric vehicle (EV) manufacturers.
The ministry’s report criticizes the EU’s Foreign Subsidies Regulation for its “selective enforcement” and its “vaguely defined” criteria for identifying foreign subsidies. The investigative process, the ministry contends, “overburdens Chinese companies” with excessive information requests.
The investigative procedure “lacks transparency” and creates uncertainty for companies under investigation. The ministry also notes that companies face fines for non-cooperation.
In October 2023, the European Commission initiated an anti-subsidy investigation into Chinese passenger battery electric vehicle (BEV) imports. A year later, the EU imposed import duties exceeding 45% on these vehicles.
In response, China implemented provisional tariffs on EU brandy and threatened higher tariffs on large-engine gasoline cars. Chinese authorities have also filed a WTO complaint, alleging EU “protectionism.”