China files trade complaint against Turkey over EV tariffs

• 40% levy on Chinese-made vehicles
• Original tariff two years old
• China to build EVs in Turkey

Beijing has lodged a trade dispute complaint against Turkey at the World Trade Organisation over Ankara’s efforts to stem a potential tide of imported Chinese electric vehicles.

China’s launching the first stage of the dispute mechanism (termed a request for consultations) comes more than two years after Turkey first imposed tariffs on Chinese made-EVs, with a 10 percent levy announced on all imports in July 2022. 

Ankara subsequently raised the tariff rate to 40 percent earlier this year, a move intended to protect its domestic EV range, developed and marketed under the brand name Togg.

In a statement issued on October 8, China’s diplomatic mission said: “The discriminatory measure taken by Turkey is against WTO rules, and is protectionist in nature. We urge Turkey to follow WTO rules and immediately correct its measures.”

• Turkey imposes restrictions on hybrid car imports

• Homegrown Togg dominates EV sales in Turkey

• Electric vehicles help Turkey hit record car sales in 2023

There is a degree of irony in China bringing Turkey before the WTO over the EV issue, as the Chinese carmaker BYD is advancing plans to develop a $1 billion production facility in Turkey, to take advantage of that country’s customs union with the EU and circumvent European tariffs.

Other Chinese marques, including Chery, are also reported to be investigating Turkey as a stepping stone into Europe.

Anıl Şentürk, the chair of the Istanbul Chamber of Commerce’s automotive sector committee, said the WTO appeal by China was a political move, the latest since the imposition of the 40 percent tariff.

“Chinese EVs have a share in the domestic market, but not as significant as Togg or Tesla,” he told AGBI.

“The move to increase customs duties by the Turkish government was a strategy to attract Chinese EV production to Turkey, and was successful.”

Dispute with EU

However, the true mark of success would be if Chinese EVs were fully produced in Turkey, using domestically manufactured components, rather than assembled parts made in China, he said.

China is also in dispute with the EU over duties on EVs, after the EU set a tariff rate of up to 45 percent on Chinese EV imports on October 4. 

However so far China has not called on the WTO to arbitrate on the EU’s new tariff, instead countering with customs duties rises of its own, including requiring European producers to lodge a security deposit with authorities of up to 39 percent of ticket price on imports of brandy. 

As of Tuesday evening, Turkey had not issued a formal response to the Chinese request tabled with the WTO.