In light of recent developments, it has come to the attention of a Chinese business group that there may be a potential for tariff increases on car imports. This is believed to be a response to the actions taken by the U.S. and European Union regarding Chinese electric vehicles. It is evident that trade tensions between China and the West are intensifying.

According to a statement from the China Chamber of Commerce to the EU based in Brussels, insiders have revealed that Beijing is contemplating the implementation of temporary additional tariffs on imported cars that are equipped with large-displacement engines.

“This potential action has significant implications for carmakers in Europe and the United States, especially considering recent events such as the announcement of tariff increases on Chinese electric vehicles by Washington and Brussels’ preparations for preliminary measures in a prominent antisubsidy investigation into Chinese EVs,” stated the chamber.

As U.S. Treasury Secretary Janet Yellen visits the EU, she aims to rally her European counterparts in addressing the increase in Chinese exports. This development follows comments made by Liu Bin, a policy adviser in China’s auto industry, who hinted at a potential tariff hike in an interview with the Chinese Communist Party-owned tabloid, Global Times.

“In the short term, it is recommended to increase the temporary tariff rate on imported sedans and sport-utility vehicles with engines larger than 2.5 liters. This measure aims to decrease imports and influence consumer expectations,” stated Liu, who has been involved in formulating China’s auto policies.

According to WTO rules, China has the option to increase its temporary tariff rate on imported vehicles to a maximum of 25 percent, as mentioned by Liu. According to Liu, the potential move aligns with China’s goals of reducing emissions and promoting sustainability in the auto industry.

In 2023, China imported 250,000 cars with engines larger than 2.5 liters, which made up 32 percent of its total car imports, according to official data reported by the Global Times.

China’s state broadcaster’s social-media account issued a warning on Saturday, stating that the country possesses adequate countermeasures and may retaliate if the EU persists in implementing trade actions against Chinese companies.

The following day, Beijing initiated an investigation into the import of polyoxymethylene copolymer, a commonly used plastic in automotive components and electronics, from the United States, European Union, Japan, and Taiwan.