The Sourcing Elite Board (SEB) is an exclusive, invitation-only club for top industry professionals, created by Global Sources. It currently has over 30 members in Shanghai, mostly senior executives and academically trained professionals in the sourcing sector. SEB periodically hosts internal events where members can discuss sourcing strategies, ecommerce innovations, and the global economic landscape. These activities aim to drive innovation, extend the leading edge of the industry, and provide a dynamic platform for sourcing experts to connect and share ideas.
Recently, Ms Guo Shan, invited to join the SEB forum, shared her insights in an interview with Chief Executive China (CEC) on the changes and trends in global trade and China–US and China–Europe relations. She also discussed the impact of domestic economic stimulus policies and offered advice for Chinese companies expanding overseas.
This interview was first published in Chinese in Chief Executive China in November 2024. Continued from Part 1.
CEC: How will China–EU relations develop after the imposition of electric vehicle tariffs?
Guo Shan: One premise for discussing this topic at present is that the issue of electric vehicle tariffs is not yet settled. China and the EU are still in negotiations.
Firstly, we can see that Europe and the US have different attitudes toward electric vehicle tariffs: The US wants to directly ban Chinese electric vehicles from the US market. However, Europe wants to raise tariffs to force Chinese electric vehicle companies to invest in Europe. Therefore, Europe is adopting a step-by-step approach.
Standard anti-subsidy investigations follow a 13-month timeline. Typically, provisional measures are announced at the nine-month mark and remain in effect for four months, with final tariffs determined at the conclusion of the 13-month investigation period. In this particular case, the EU initiated its anti-subsidy investigation in October 2023. The provisional measures announced in June 2024 represent an interim decision. Crucially, the European Commission emphasized that during this June-to-October window, affected companies still have negotiation opportunities to potentially modify the outcome.
Moreover, the EU's provisional tariff measures feature a tiered rate system, offering lower tariffs to Chinese automakers with investments in Europe. For instance, SAIC Motor faces a 35.3% duty, while BYD enjoys a reduced 17% rate—a recognition of its recent aggressive expansion plans in Europe that align with the region's economic priorities.
The EU is essentially using these differential tariffs as an investment incentive—while the current rates remain prohibitive for most, they’ve deliberately left room for negotiation. After the provisional tariffs take effect in November, individual companies can still lobby for lower rates. Tesla, for example, secured a sub-10% tariff through bilateral talks. This sends a clear signal: The European Commission is keeping the door ajar for Chinese firms willing to negotiate, offering tariff concessions in exchange for local investment commitments.
For China, individual corporate negotiations would never yield favorable terms. Beijing’s strategy has been to coordinate talks through the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), presenting a unified industry front to the European Commission.
This context set the scene for Commerce Minister Wang Wentao’s European tour last September, with Italy as a key stop. The message was clear: tariff reductions would boost Chinese investment in Europe, while maintaining duties would undermine investor confidence. The initially positive European response led Beijing to consider the matter resolved — until October’s European Commission vote shattered that illusion. Despite earlier assurances, Italy and other engaged countries voted in favor of higher tariffs, blindsiding Chinese officials. Beijing’s countermove was unequivocal: continued tariff hikes would nullify all prior investment commitments.
Now, with the added variable of Trump’s potential return, European delegations have rushed back to the negotiating table. While both sides agree on the need for an electric vehicle tariff resolution, the EU’s convoluted proposal has met Chinese resistance. As talks resume, the core question remains: Is there still room for tariff adjustments, or has the window closed?
The future of China–EU relations hinges largely on the outcome of the ongoing tariff negotiations.
While the European Commission wields significant authority over trade policy, its approach has faced growing dissent among member states. Finland’s president, during his recent visit to Beijing, explicitly questioned the rationale behind the electric vehicle tariffs, noting that electric vehicles account for just 2% of China’s exports to the EU and urging stability in broader trade relations.
From Beijing’s perspective, the EU’s tariff hike is a purely political maneuver — and one that demands a political response. China is likely to retaliate with countermeasures, including targeted tariffs and restrictions on Chinese investments (particularly in electric vehicles) in countries that supported the EU’s decision. Such a tit-for-tat escalation would mark a troubling turn.
Yet there are reasons for cautious optimism. Europe’s political landscape remains fragmented, with many EU members opposing the tariffs. Even if China scales back investments in countries like Italy, alternative markets — such as Hungary, Finland, and other Nordic states — remain open. Establishing production hubs in these nations could still grant Chinese firms access to the European market. Ultimately, while trade tensions may strain political ties, economic pragmatism could prevail, leading to a paradoxical "cold politics, hot economics" dynamic in China–EU relations.
This is part 2 of 3 of this interview. You can read part 1 here.
Established in 2022 by Global Sources, the Sourcing Elite Board (SEB) is a collaborative initiative dedicated to advancing the sourcing industry through shared expertise and innovative strategies. Senior executives, from buying offices to retailers and brands, are welcome to join this distinguished community.
• The content of this interview reflects only the views of the interviewee and not necessarily those of Chief Executive China or Global Sources.
