In response to the European Commission’s accusations of Chinese state subsidies artificially lowering the price of electric vehicles (EVs), Chinese authorities launched an anti-dumping investigation into brandy liquor imported from the European Union (EU). The European Commission had initiated an anti-subsidy probe into Chinese EV imports, alleging that China’s massive state subsidies were distorting market competition by lowering the price of EVs. This could lead to potential punitive tariffs on Chinese EVs. In retaliation, China initiated an anti-dumping investigation on EU-made liquors. As a result, the market of several major European liquor groups experienced a decline. These retaliatory measures signal a growing trade dispute between China and the EU.
Compounding this dispute is the revelation that the Chinese Communist Party (CCP) appears to have orchestrated the expansion of its electric vehicle (EV) industry by injecting considerable state funds in subsidies. China’s EV sales have increased significantly in recent years, owing to the substantial subsidies channeled into the industry. In addition to its confrontational response to the EU’s anti-subsidy probe, China’s exportation of cheaper EVs is said to be part of a broader strategy to expand overseas markets and influence Western powerhouses.
These developments have led to reactions from European leaders, who view China’s state subsidies in the EV industry as unfair and potentially harmful to international trade. While the CCP’s measures may create an economic disadvantage for non-Chinese competitors in the EV market, some observers argue that it could also result in significant losses for Chinese foreign trade enterprises. The ongoing dispute between the EU and China underscores the complex dynamics of international trade and political relations in the context of diverse strategic and economic interests.