Analysis of the Legitimacy of the EU's Anti-Subsidy Investigation into Chinese New Energy Vehicles and Its Normative Implications

Abstract

In October 2023, the European Union formally initiated an anti-subsidy investigation into Chinese new energy vehicles under the Anti-Subsidy Regulation (EU) 2016/1037. In October 2024, it issued a final ruling imposing a five-year anti-subsidy duty on electric vehicles imported from China. This paper analyzes the legal basis and procedures of the investigation, examining its conflicts with the Agreement on Subsidies and Countervailing Measures (SCM Agreement) and multilateral trade rules. It argues that the EU's actions risk exceeding its authority and violating international law. The investigation breaches numerous fundamental WTO principles, and China's subsidy policies do not fall under the subsidy categories defined by the SCM Agreement. Factually, the EU disregards that the competitiveness of China's new energy vehicles stems from inherent strengths within the industry itself. Procedurally, the EU's investigation process is unfair and non-transparent, failing to sincerely facilitate bilateral negotiations and consultations. It violates procedural justice in terms of investigation initiation, procedural participation, and procedural disclosure. The EU's anti-subsidy investigation, aimed at industrial protection, may generate a series of adverse effects. This holds significant implications for the overseas expansion of China's new energy vehicles and international subsidy governance rules. This paper will also propose a series of policy recommendations.