EU to take 'targeted' approach on any illegal China subsidies

The EU would impose "targeted" duties on Chinese electric cars if Beijing's state aid for the sector is proven to be illegal, bloc chief Ursula von der Leyen said Tuesday.

Brussels last year angered China after launching an anti-subsidy investigation into Chinese electric cars with growing expectations the EU will slap on duties in response.

The United States earlier this month sharply raised tariffs on Chinese-made electric vehicles, but von der Leyen insisted the EU would take a different approach.

"I can guarantee that the level of the duties we would impose is correspondent to the level of damage, so much more targeted, much more tailored," the European Commission president said.

The commission is expected to decide whether to impose provisional duties on Chinese electric cars by June 5. If it opts to do so, they would apply from July 4.

Some EU states are wary of such a move.

Germany and Sweden last week expressed reservations about possible European tariffs, fearing the impact on trade between the West and China.

Von der Leyen, however, dismissed claims China and the EU were already in a trade war.

"No, I don't think that we are in a trade war," she said during a debate organised by the Bruegel think tank and the Financial Times.

She insisted the EU wanted to "de-risk" its economic ties to China, but not to "decouple" as it has done from Russia since Moscow's 2022 assault on Ukraine.

But tensions between Beijing and Brussels are rising as the EU has launched a raft of probes targeting Chinese subsidies for solar panels, wind turbines and trains.

Last month, the EU kickstarted a probe into Chinese public procurement of medical devices amid fears Beijing is favouring local suppliers.

Beijing has warned it will respond forcefully to any action.

"The Chinese side has readied ample countermeasures," the China Chamber of Commerce to the EU (CCCEU) said Saturday.

CCCEU referred to a "legal expert" quoted in Chinese media who said "given the substantial subsidies in the EU's agricultural sector, European wine and dairy products may find themselves caught in the crossfire".