China and the EU will hold discussions on electric car tariffs.

The risk of soaring Chinese electric car prices in the EU could be easing after both sides agreed to negotiate a planned series of import taxes. Top officials from both regions discussed the tariffs in a call on Saturday and agreed to further negotiations, despite ongoing frictions. This call marks the first time the two sides have agreed to negotiate since the EU threatened China with electric vehicle (EV) tariffs of up to 38%.

The EU claims Chinese EVs are unfairly subsidized by the Chinese government, while China accuses the EU of protectionism and violating trade rules. An EU spokesperson told the BBC the call between Trade Commissioner Valdis Dombrovskis and his Chinese counterpart Wang Wentao was “candid and constructive,” adding that both sides would “continue to engage at all levels in the coming weeks.” However, the EU remains firm on addressing the “injurious subsidization” of Chinese EVs in any negotiated outcome.

China issued a similar statement on Saturday, reiterating its disagreement with the EU. Additionally, Mr. Wentao met with German Vice-Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck. In a Facebook post, China’s Ministry of Commerce stated its “firm opposition” to the tariffs and repeated its threat to file a lawsuit with the World Trade Organization (WTO) to defend its legitimate rights and interests.

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