China Investigates EU Subsidies in Response to Tariffs on Electric Cars

China is investigating EU subsidies for dairy products, pork, and brandy in response to EU special tariffs on electric cars. Talks between China and the EU have remained fruitless.

China is also considering raising import tariffs on large-engined gasoline vehicles in response to EU tariff votes on Chinese-made electric vehicles. Germany, France, Italy, and Spain would be most affected.

China's exports of vehicles with engines larger than 2.5 litres to China were worth $1.2 billion last year. The EU Commission defends the legality of the tariffs, but legal experts warn they may have breached WTO rules.

BMW has sold more electric vehicles than Tesla in Europe for the first time. The EU plans to impose tariffs on Chinese electric cars due to suspected subsidies.

15 EU countries must vote to block the permanent tariffs, expected by 30 October. China has filed a complaint with the WTO over the provisional duties and is likely to file a second complaint if unsatisfied with the final measures.