Beijing and Brussels have reached an agreement to replace tariffs on Chinese electric vehicles imported into the European Union with a minimum import price mechanism, the bloc said on Monday.

Under the deal, the tariffs imposed as part of the EU’s trade defence action will be substituted by a floor price for Chinese-made EVs entering the European market, according to a statement from the European Commission.

The EU had launched an anti-subsidy investigation into Chinese electric vehicles in October 2023. The probe concluded a year later with the imposition of countervailing duties ranging from 7.8% to 35.3%, to be applied for five years.

The new arrangement marks a shift from punitive tariffs toward a price-based management approach aimed at addressing subsidy concerns while keeping the market open to Chinese manufacturers.