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Beijing and Brussels are taking the \u201cfirst step\u201d towards resolving a months-long trade dispute over Chinese electric cars with new talks, after the European Union imposed additional tariffs<\/a> of up to 38.1% that go into effect July 4.<\/p>\n The EU and China will start talks over the EV tariffs, following a video conference meeting between China Commerce Minister Wang Wentao and EU Trade Commissioner Valdis Dombrovskis on Saturday, according to a statement<\/a> from the commerce ministry. The statement did not reveal any further details on when the discussions would start.<\/p>\n The announcement came during German Vice-Chancellor Robert Habeck\u2019s three-day visit to China, the first by a senior European leader since the tariffs were unveiled earlier this month. In comments on Saturday, Habeck called the planned talks a \u201cfirst step,\u201d with many more needed to bring both sides together.<\/p>\n Wang met Habeck on Saturday and expressed Beijing\u2019s displeasure to the German minister, according to a Chinese commerce ministry statement<\/a>. <\/p>\n Chinese state media are already celebrating the announcement of talks, with state-owned media outlet Global Times<\/a> <\/em>calling it proof of Beijing\u2019s \u201cutmost sincerity\u201d in trying to resolve trade disputes through negotiation.<\/p>\n The talks could be a welcome sign that both sides are open to discussions. \u201cBoth parties are taking an open attitude, which likely indicates that Chinese OEMs may be charged at a lower rate than previously announced,\u201d Vincent Sun, an equity analyst at Morningstar, says. Sun also notes that the tariffs also affect China-made cars from European companies, like BMW. <\/p>\n Last October, Brussels launched an anti-subsidy probe<\/a> into Chinese-made EVs to determine whether they benefit unfairly from Chinese state support.<\/p>\n Beijing, on the other hand, slammed the probe<\/a> as \u201cprotectionist behavior,\u201d and ignores China\u2019s fiercely competitive EV sector.<\/p>\n Germany has criticized the EU\u2019s decision to increase tariffs following the anti-subsidy probe (primarily backed by France). German chancellor Olaf Scholz has lobbied to minimize the scale of the tariffs, according to the Financial Times<\/a> <\/em>and Politico<\/a>. <\/em>German transport minister Volker Wissing also warned the increased tariff could risk<\/a> a \u201ctrade war\u201d with China. <\/p>\n The German Association of the Automotive Industry has also warned<\/a> that the potential damage from the tariffs could be greater than the benefits. <\/p>\n Germany, the EU\u2019s largest economy, has extensive trade relations with China. The Asian economy accounted<\/a> for nearly a third of Germany\u2019s auto industry sales last year. It was also Germany\u2019s biggest trading partner for a decade until the U.S. overtook it this year. <\/p>\n Both China and the EU have escalated their tit-for-tat trade threats in recent months since October\u2019s anti-subsidy probe.<\/p>\n China first launched an anti-dumping probe on European brandy in January<\/a>, then followed up with a probe into European pork last week<\/a>.<\/p>\n Chinese automakers are also reportedly<\/a> asking Beijing to impose retaliatory tariffs on European gas cars entering China. <\/p>\n For its part, the EU is currently investigating Chinese government support in industries like wind turbines and medical devices. <\/p>\n Europe\u2019s announced EV tariffs are already threatening<\/a> to change the behavior of China\u2019s EV manufacturers. Over 80% of Chinese vehicle and industry chain companies are less confident about investing in Europe in the near future, according to a recent survey by the China Chamber of Commerce to the EU and the China Economic Information Service.<\/p>\n<\/div>\n\nA potential China-EU trade war<\/h2>\n