BEIJING (Reuters) – Beijing wants the European Union to eliminate initial tariffs on Chinese electric vehicles by July 4, according to China’s state-controlled Global Times newspaper, after the two sides reached an agreement to hold novel trade talks.

Temporary EU tariffs of up to 38.1% on imported Chinese electric vehicles are to be introduced from July 4 while the bloc investigates what the EU says are excessive and unfair subsidies to Chinese electric vehicle makers.

China has repeatedly called on the EU to abolish tariffs, expressing its willingness to negotiate. Beijing does not want to be embroiled in another tariff war, still stung by U.S. tariffs on its goods imposed by the Trump administration, but says it will take all steps to protect Chinese companies if such a situation occurs.

The two sides agreed to start tariff talks after a telephone conversation between EU Commissioner Valdis Dombrovskis and Chinese Trade Minister Wang Wentao on Saturday during a visit to China by Germany’s economy minister, who said the door to discussions was “open.”

The best result of the talks is the EU’s withdrawal from the tariff decision before July 4, the Global Times reported behind schedule on Sunday evening, citing observers.

According to the newspaper, increasingly protectionist EU moves will result in China taking countermeasures, and an escalation of trade frictions would only lead to a situation in which both sides have to lose.

The rate setting is expected to be finalized on November 2, after the end of the EU’s anti-subsidy investigation.

China has rejected accusations of unfair subsidies, saying the growth of China’s electric vehicle industry is the result of advantages in technology, market and industry supply chains.