European carmakers have said they are worried that China could hike import duties on the luxury vehicles they make.
The fear is that Beijing will target them if the EU Commission does not back down over accusations of unfair trade practices in China.
The European auto industry association (ACEA) said it has been told China’s Commerce Ministry is to investigate a complaint about EU built cars with larger engines.
That follows punative tariffs being introduced on Chinese solar panels exported to Europe which the EU believes are being unfairly subsidised and “dumped” at prices less than the cost of manufacture.
A spokesperson for ACEA said if this becomes a real trade war then “I think the Chinese will retaliate for sure”.
Meanwhile it has been disclosed that the United States, China and the European Union have been talking about a possible “global” agreement to resolve solar energy disputes.
“There have been some initial discussions with both the European market and China about how to deal with this on a global basis,” White House international economic affairs adviser Mike Froman said at a Senate hearing on his nomination to be US trade representative.
The United States last year slapped duties on billions of dollars of solar energy products from China that it said were unfairly priced and subsidised.
After the European Union imposed similar duties on the Chinese goods, Brussels started talks with China on a possible negotiated settlement.
China responded to the US moves by threatening duties on US exports of polysilicon, which is used to make solar cells. Beijing also threatened to put up duties on European wines.