China and the European Union have agreed to co-operate to avert planned punitive tariffs on electric cars, the Chinese Commerce Ministry said on Saturday.
Following a video meeting between Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Valdis Dombrovskis, the ministry said consultations will be held on the EU's investigation into Chinese state subsidies for electric vehicles.
The European Commission last week announced plans for tariffs of up to 38.1% on the import of Chinese electric vehicles. The import duties are due to come into force from early July, but could be retroactively withdrawn if the two sides reach an agreement.
Existing EU tariffs on all non-EU manufacturers of cars stand at 10%.
Tensions over Chinese exports have been rising in recent months, with the United States and the EU accusing Beijing of supporting sectors like green technologies with massive state subsidies.
The EU threat follows the imposition of 100% tariffs by the US on Chinese electric car imports.
According to the Commission, Chinese electric cars are normally around 20% cheaper than models built in the EU.
Germany's Habeck: 'This is a first step'
On a visit to China, German Vice Chancellor Robert Habeck described the development as new and surprising, as previous efforts to formally open negotiations have failed in recent weeks.
"This is a first step and many further will be necessary," said Habeck, who also serves as Germany's economy minister.
Asked about possible compromises in the upcoming negotiations, he responded: "I can see some, including in the field of electric mobility." However, China must now make proposals and the Commission must conduct the negotiations, he said.
Habeck met with a number of Chinese officials in Beijing and Shanghai on Saturday, including Wang and Industry Minister Jin Zhuanglong, in what he described as a "very open and intense atmosphere."
He emphasized that the threatened EU tariffs were not punitive tariffs like those imposed by the United States, Brazil or Turkey.
The vice chancellor said he was not criticizing China for over-producing cars, nor for its state subsidies. The problem arises when government funds are used to promote exports, Habeck argued.
"I don't want to have tariffs because I believe in open markets," he continued.
Asked about his role in securing the new Chinese stance, Habeck said: "Whether it was a contribution and how much of a contribution it might have been is for others to judge."