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China Takes Legal Action Against EU Over Electric Vehicle Tariff Hike

China has launched a legal dispute against the European Union (EU) at the World Trade Organization (WTO) in response to the EU’s decision to raise import tariffs on Chinese electric vehicles (EVs). The case comes on the heels of an EU investigation that concluded Chinese carmakers benefit from state subsidies, giving them an unfair edge in the European market.

Key Details:

  1. WTO Complaint: China’s filing marks its second WTO challenge over higher tariffs, with the complaint aiming to address the EU’s determination that Chinese EV manufacturers benefit from unfair government support.
  2. Impact on Chinese Car Makers: The new EU tariffs range from 17% for BYD, 18.8% for Geely (Volvo’s parent company), to a significant 35.3% for SAIC Motor Corp, making it one of the most heavily affected companies.
  3. WTO Dispute Timeline: Under WTO dispute settlement rules, China and the EU have 60 days to negotiate a resolution. If unresolved, the case may proceed to a WTO panel ruling. However, the WTO’s highest appellate body remains inactive due to a shortage of judges, potentially complicating the resolution process.

The heightened tariffs, which took effect on November 1, reflect growing trade friction between Brussels and Beijing. EU officials argue that China’s subsidies and access to inexpensive raw materials have granted Chinese EV companies excessive leverage over European competitors. In response, Brussels is exploring solutions, such as adjusting price commitments, to address these market imbalances while upholding WTO principles.

Negotiations between the EU and Chinese officials are expected to intensify in the coming weeks, with an EU delegation likely to travel to China to pursue a compromise. Both sides aim to foster fair market conditions while respecting WTO guidelines.

Cyprus Sees Sharp Rise In New Mortgage Lending In May As Deposit Rates Remain Among Eurozone’s Lowest

New mortgage lending in Cyprus rose sharply in May 2026, highlighting continued demand for housing finance despite elevated borrowing costs. Net new housing loans increased to €145.5 million from €106 million in April, according to the Central Bank of Cyprus.

Overall Lending Gains Momentum

Net new lending across all categories reached €361.9 million in May, up from €331.3 million a month earlier, reflecting stronger credit activity among both households and businesses.

Mortgage Rates Continue To Rise

The average interest rate on new housing loans increased to 4.06% in May from 3.73% in April, as demand for residential financing remained resilient despite higher borrowing costs.

Consumer And Small Business Lending Expand

Consumer lending also strengthened, with new loans rising to €23.9 million from €21.8 million in April.

Lending to non-financial corporations for amounts up to €1 million climbed to €63.4 million from €39.4 million, while loans exceeding €1 million declined to €121.5 million from €156.8 million, pointing to softer activity among larger corporate borrowers.

Borrowing Costs Show Mixed Trends

Interest rates moved in different directions across lending categories. Consumer loan rates eased to 6.95% from 7.19%, while rates on business loans of up to €1 million edged higher to 4.27%. The average rate on loans above €1 million fell to 3.85%.

Deposit rates also increased modestly. One-year household time deposits rose to 1.25% from 1.20%, while comparable deposits for non-financial corporations increased to 1.31% from 1.23%.

Deposit Rates Remain Among The Eurozone’s Lowest

According to the Central Bank of Cyprus, lending rates remain broadly in line with the euro area median. Deposit rates, however, continue to rank among the lowest in the eurozone, reflecting the banking sector’s strong liquidity position.

Borrowers Shift Toward Fixed-Rate Mortgages

Borrowers continued to favour longer fixed-rate mortgages in May. Loans with variable rates or an initial fixed-rate period of up to one year accounted for 17.8% of new housing lending, down from almost 100% at the beginning of 2022.

The shift reflects a growing preference for payment certainty as households adapt to a higher interest-rate environment.

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