China files WTO dispute against EU’s countervailing duties on imports of Chinese EVs

China has initiated dispute settlement proceedings against the European Union at the World Trade Organization to safeguard its interests in the electric vehicle industry, a spokesperson for China’s Ministry of Commerce said at a press conference Oct. 30, referring to the EU's decision to impose countervailing duties on Chinese EVs.

The EU’s final ruling will increase the cost of Chinese EVs and make them less competitive, several industry sources said. However, it didn’t have much of an impact on the Chinese lithium salts market, which remains rangebound at low levels, the sources added.

China has repeatedly pointed out that there are many unreasonable and non-compliant aspects in the EU's anti-subsidy investigation into China's EVs, which is a real protectionist practice of "unfair competition" in the name of "fair competition," the spokesperson said.

In addition to the serious lack of transparency in the procedure, the European Commission did not fundamentally solve the underlying representation problem, nor did it conduct an objective analysis of the injury indicators for EU industry, which led to wrong identification of causality, said China Chamber of Commerce for Import and Export of Machinery and Electronic Products, or CCCME.

Since its inception, CCCME has been authorized by 12 major Chinese EV enterprises to participate in the damage investigation process as an interested party, actively cooperate with the European Commission’s investigation, and submit seven industry defense opinions to the European Commission on behalf of China's EV industry.

The unfair, unreasonable and unobjective determination made by the European Commission in this case is a serious violation of the relevant WTO and EU anti-subsidy rules, CCCME said.

In a statement released late Oct. 29, the European Commission confirmed that it will impose countervailing duties on imports of battery EVs, or BEVs, from China for a period of five years.

As previously announced, the tariff duty rates, which will be implemented on top of an existing 10% tariff, are to be imposed at a rate of 17% for BYD Group, 18.8% for Geely Group, 35.3% for SAIC Group, 20.7% for other cooperating companies and 35.3% for all other non-cooperating companies.

Tesla will be assigned a duty rate of 7.8% after the company requested an individual examination to determine its duty level based on the specific subsidies it received.

Battery metals prices

The Chinese lithium chemicals market might face downside pressure going into November, after a wave of slight rebounds seen since September, sources said.

The demand from downstream consumers is expected to gradually soften entering a seasonal lull, however, the production cost will lend some support to prices, keeping them from falling too much, sources said.

Platts assessed battery-grade lithium carbonate at Yuan 75,000 ($10,530)/mt on a DDP China basis Oct. 29, unchanged on the day but down Yuan 500/mt from a month earlier, S&P Global Commodity Insights data showed.