Pressure on Chinese carmakers to halt Europe expansion

Beijing said to be telling them to hold off on new deals amid trade conflict over EVs

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China is pressuring its automakers to pause expansion in the European Union due to the escalating trade conflict over electric vehicles (EVs), people familiar with the matter said.

Beijing is telling manufacturers to put on hold active searches for production sites in the region and the signing of new deals, and to generally keep a low profile while negotiations over EU tariffs on Chinese EVs are ongoing, the people said.

State-owned Dongfeng Motor Group has already halted plans to potentially manufacture cars in Italy in response to the warnings, the people said.

China's directive, which is not a mandatory order, may fuel tensions as both powers vie for dominance over the car industry.

Earlier in October, the EU voted to boost tariffs on made-in-China electric cars to as high as 45 per cent, arguing that Beijing provides unfair subsidies to its automakers.

China denies that claim and has threatened duties on European dairy, brandy, pork and car sectors.