China and EU Restart EV Trade Talks Amid U.S. Tariff Escalation

China and the European Union (EU) have resumed key trade negotiations on electric vehicles (EVs), signaling a possible shift in global EV trade dynamics. The renewed dialogue focuses on implementing a price commitment mechanism for battery electric vehicles (BEVs), aiming to replace EU-imposed tariffs and ease trade tensions.

EU Tariffs Press Chinese EV Exporters

In October 2024, the European Commission imposed countervailing duties of 17% to 35.3% on Chinese BEV imports. These tariffs targeted leading Chinese automakers such as BYD, Geely, and SAIC Motor. The EU justified the move as a response to unfair pricing by Chinese EV firms.

Despite initial negotiations in late 2024, talks stalled. However, on April 10, 2025, China’s Ministry of Commerce confirmed a restart of negotiations with the EU. Both sides also agreed to discuss broader automotive investment cooperation.

U.S. Tariffs Add Global Pressure

On April 11, 2025, the United States raised tariffs on Chinese imports to 145%, targeting electric vehicles and lithium-ion batteries. These extreme measures, spanning two administrations, have blocked Chinese EV access to the U.S. market.

In response, Chinese Premier Li Qiang met with EU President Ursula von der Leyen on April 8, 2025. Their discussion focused on trade balance and improved EU market access for European firms operating in China. China seeks to counterbalance U.S. pressure by deepening economic ties with Europe.

Market Outlook Hinges on EU-China Breakthrough

Before the tariffs, the EU accounted for 28% of China’s new energy vehicle (NEV) exports. However, shipments dropped sharply following the EU’s countervailing measures. If the new talks lead to a price commitment deal, it could reopen the EU market to Chinese EVs.

The global EV industry continues to face uncertainty. Trade protectionism from both the U.S. and EU has limited China’s market access. Nevertheless, progress in these renewed China-EU talks could help stabilize EV supply chains and pricing for European consumers.