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China unveils next steps in EU brandy probe as EV tariffs take effect
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China unveils next steps in EU brandy probe as EV tariffs take effect
Jul 4, 2024 11:34 PM

BEIJING, July 5 (Reuters) -

China announced the next step in its anti-dumping

investigation into European brandy imports on Friday, ramping up

tensions on the same day the

European Commission's provisional tariffs

on Chinese-made electric vehicles take effect.

While a Commerce Ministry spokesperson stressed at a

news conference on

Thursday

that Brussels and Beijing should stay at the negotiating

table ahead of the bloc confirming tariffs of up to 37.6% on

Chinese-made EVs, the prospect of retaliation was kept alive by

a reference to another probe into

EU pork imports

.

The Commerce Ministry said on Friday it would hold a

hearing on July 18 to discuss an ongoing investigation into

claims that European brandy producers are selling into China at

below market rates.

China has repeatedly called on the EU to cancel its EV

tariffs, expressing a willingness to negotiate. It has said it

does not want to be embroiled in another tariff war - with U.S.

tariffs on its goods continuing to sting - but that it would

take all steps to protect Chinese firms.

There is a four-month window during which the EV tariffs

are provisional and intensive talks are expected to continue

between the two sides as Beijing threatens wide-ranging

retaliation.

Since January, Beijing has opened tit-for-tat

investigations into European brandy and pork imports, striking

at predominantly French, Spanish, Dutch and Danish commercial

interests as the 27-strong bloc wavers over whether to back the

Commission in an upcoming advisory vote on the EV tariffs.

The state-backed Global Times newspaper has also

reported that officials are considering opening an anti-subsidy

probe into European dairy imports and imposing tariffs on

large-engined petrol cars manufactured in Europe.

Authorities have previously dropped hints about what

they might do next through state media commentaries and

interviews with industry figures.

Analysts say China chose brandy and pork to persuade

France and Spain, who have been among the firmest backers of EU

curbs, to join the likes of Germany, whose automakers made a

third of their sales last year in China and

reportedly

wants to lobby the Commission to stop the tariffs.

After the bloc confirmed the provisional tariffs would

take effect from Friday, the Global Times published an article

calling on the EU to "show sincerity" in negotiations over the

EV curbs and a separate editorial urging Brussels to consider

European automakers' opposition to the curbs.

The Global Times also called attention to American EV

maker Tesla's manufacturing plant in Shanghai,

broadening its call to protest against the tariffs.

Chinese EV makers' Hong Kong-listed shares

fell on Friday

, led by Geely Automobile ( GELYF ), which dropped 4.1% to

HK$8.34, its lowest since March 7.

Geely Automobile's ( GELYF ) unlisted parent, Geely, faces

additional duties of 19.9%, on top of the EU's standard 10% duty

on car imports.

Chinese brands MG and NIO suggested on Thursday they

might raise prices in Europe later this year, in response to the

curbs.

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