China has lodged a complaint with the World Trade Organization (WTO) against the European Union (EU) for imposing additional customs duties on imported electric vehicles. According to a statement from the Chinese Ministry of Commerce, there is disagreement and refusal regarding the measures taken for the additional customs duties imposed on Chinese manufacturers due to sector support by the state following the subsidy investigation initiated by the EU last year. The statement emphasized that the Beijing administration will take all necessary measures to protect the legitimate rights and interests of Chinese companies and has resorted to the WTO’s dispute resolution mechanism on this matter. It was also mentioned that China prefers resolving disputes through dialogue and is currently engaging in new stage negotiations with the EU, hoping for constructive cooperation between the two sides to reach a solution that will not lead to trade disputes acceptable to both parties. On the other hand, the EU Commission announced yesterday the completion of the subsidy investigation into electric cars manufactured in China, revealing that additional customs duties on electric car imports from that country to the EU will be in effect for 5 years. Following publication in the Official Journal of the EU today, the new regulation will come into force tomorrow, introducing additional taxes of 7.8% for Tesla electric car models produced in China, 17% for Chinese companies like BYD, 18.8% for Geely, 20.7% for collaborating manufacturers, and 35.3% for non-collaborative state-owned companies like SAIC Motor and others. This increase in tariffs that followed the subsidy investigation initiated by the Commission in October 2023 appears to be a potential trigger for a trade war between China and the EU. After EU countries approved the tariff hikes on October 4, the Chinese Ministry of Commerce announced the imposition of temporary customs duties on imported cognacs from EU countries. Moreover, China had previously initiated dumping investigations on pork products and subsidy investigations on dairy products imported from Europe. Additionally, the Beijing administration has suggested that it may impose additional customs duties on imported cars from Europe, with plans to increase customs duties on imported large gasoline vehicles. This move is expected to adversely affect companies from EU countries that export a significant portion of large motorized vehicles to China.