The European Union and China have agreed to explore setting minimum prices for Chinese-made electric vehicles as an alternative to tariffs imposed last year, a European Commission spokesperson said Thursday.
What Happened: EU Trade Commissioner Maros Sefcovic spoke with Chinese Commerce Minister Wang Wentao within the past 24 hours, with negotiations set to begin immediately, reported Reuters.
The potential pricing agreement would replace EU tariffs currently ranging from 17.0% for BYD BYDDY to 35.3% for SAIC, on top of the standard 10% car import duty imposed last October.
“Any minimum prices would need to be as effective and enforceable as the EU tariffs,” Sefcovic has previously stated, noting that a single minimum price would likely be inadequate for complex products like cars.
Why It Matters: The negotiations come amid escalating global trade tensions, with U.S. President Donald Trump recently announcing sweeping new tariffs.
Tesla Inc. TSLA CEO Elon Musk reportedly appealed directly to Trump to reverse these policies, advocating instead for a “free trade zone” between Europe and the United States. “At the end of the day, I hope it’s agreed that both Europe and the United States should move ideally to a zero-tariff situation,” Musk said during an Italian political event.
Despite Musk’s significant political contributions to Republicans and his advisory role to Trump, his intervention has been unsuccessful. Tesla’s stock has declined by more than 33.45% this year amid market uncertainty.
Meanwhile, the U.S. electric vehicle market continues to grow, with sales increasing 10.6% year-over-year in the first quarter of 2025. Tesla maintains market leadership with a 43.5% share despite an 8.6% sales decline, followed by General Motors Co. GM at 8.9% and Ford Motor Co. F at 7.7%.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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