China and the EU on Saturday agreed to start consultations over the EU’s anti-subsidy investigation against Chinese electric vehicles (EVs), Report informs via POLITICO.

“On June 22, Minister of Commerce Wang Wentao and Executive Vice President and Trade Commissioner of the European Commission Valdis Dombrovskis had video talks at the request of the latter,” the Chinese ministry posted on X. “The two sides agreed to start consultations on the EU’s anti-subsidy investigation into electric vehicles originating from China.”

In a statement, European Commission trade spokesperson Olof Gill said Dombrovskis and the Chinese minister had a “candid and constructive call on Saturday on the EU’s anti-subsidy investigation into battery electric vehicles produced in China.”

“The two sides agreed to engage on the basis of facts and in full respect of WTO rules,” he added. “The EU side emphasized that any negotiated outcome to its investigation must to effective in addressing the injurious subsidization.” The two sides will “continue to engage at all levels in the coming weeks.”

The EU and China have been engaged in an escalating trade war, with the EU announcing tariffs on Chinese electric vehicles earlier this month and Beijing launching an anti-dumping probe into EU pork products.

German Vice Chancellor Robert Habeck is currently in China — his first visit to the country during his tenure — where he said the EU’s proposed tariffs on imports of EVs from China are “not a punishment,” but compensation for the advantages granted by Beijing to Chinese companies.