China’s Electric-Vehicle Makers Face EU Antisubsidy Probe

livemint.com:

BRUSSELS—The European Union is launching an antisubsidy investigation into China’s electric-vehicle makers, opening a new front in the battle for leadership of the global clean-technology industry. The probe, announced Wednesday, reflects growing concern in Europe about the impact of low-price products from China on the bloc’s domestic industries. It could result in tariffs if officials from the European Commission, the bloc’s executive body, conclude that Chinese EV manufacturers are receiving subsidies that are hurting Europe’s auto industry.

“Global markets are now flooded with cheaper Chinese electric cars," European Commission President Ursula von der Leyen said in a speech on Wednesday. “Huge state subsidies" are keeping prices artificially low and distorting the European market, she said. The move comes as the EU puts growing emphasis on what it refers to as fair competition.

The bloc has introduced new rules to expand its options for dealing with what it perceives as unfair trade practices, including measures aimed at pushing back against trade or investment-related coercion and tackling foreign subsidies that it considers to be distortive. However, divisions remain within the bloc over how forcefully the EU should respond to trade frictions with China, the bloc’s biggest trading partner. Some member states, including France, have placed a greater emphasis in recent months on the impact of U.S.

subsidies to clean-technology companies under the Inflation Reduction Act. The EU has also aligned itself more closely with the U.S. in recent years on its approach to China, with some officials voicing increasing concern about the risks the bloc faces from a geopolitical rival.