A World Trade Organization (WTO) panel has found that Turkey’s additional duty on electric vehicles and some hybrid vehicles violate international trade rules, but the ruling does not order Ankara to compensate China.

The WTO circulated the 122-page report on July 28 in a case brought by China over Turkey’s taxes and import rules for Chinese vehicles.

The panel recommended that Turkey bring the measures into line with its obligations under the General Agreement on Tariffs and Trade (GATT).

It did not assess China’s losses, set a financial award or order Turkey to make a payment.

The ruling will cost Turkey at least $100 million a year, or about 4.49 billion lira, main opposition New Party lawmaker Deniz Yavuzyılmaz claimed Monday.

Yavuzyılmaz did not explain how he calculated the figure.

He urged Trade Minister Ömer Bolat to appeal the ruling by September 26 and resign over repeated changes to Turkey’s vehicle taxes.

Compensation is voluntary and temporary and becomes available only if a country fails to comply with an adopted ruling by the end of an agreed period, WTO rules state.

If the countries cannot agree on compensation at that stage, China could seek WTO approval to suspend trade concessions equal to the harm it suffered.

The process does not amount to an immediate demand that Turkey pay China in cash.

The panel report has not yet been adopted by the WTO’s Dispute Settlement Body.

WTO rules require a panel report to be adopted within 60 days of circulation unless one of the parties appeals or members agree not to adopt it.

Turkey and China on Tuesday jointly asked the WTO’s Dispute Settlement Body to approve an arrangement that would give them until October 27 to appeal or seek adoption of the panel report. The request is due to be considered on September 25, one day before the normal 60-day period expires.

China requested talks with Turkey in October 2024 over additional duties on electric vehicles and other cars, along with an import permit system.

The WTO established the panel in February 2025 after the talks failed to settle the dispute.

The panel reviewed the measures as amended in September 2025 rather than only the earlier taxes imposed on Chinese cars.

Under the amended rules, Turkey charges additional duty of 30 percent or at least $8,500 on each electric vehicle imported from a country with which it has no regional trade agreement, whichever amount is higher.

The rates are 25 percent or at least $6,000 for gasoline cars and non-plug-in hybrids and 30 percent or at least $7,000 for plug-in hybrids.

Those duties come on top of Turkey’s standard 10 percent duty on the vehicles.

The panel found that the additional duty on electric vehicles and hybrids covered by 34 earlier tariff categories exceeded Turkey’s WTO tariff limits and gave the imports less favorable treatment.

China failed to prove that the duty on gasoline cars violated the rules, while the panel also rejected its claims concerning some hybrid vehicles.

Turkey argued that the duty protected health and natural resources, but the panel found that Ankara had not shown a link between the taxes and those aims.

The panel upheld most exemptions for Turkey’s free trade partners but ruled that an exemption granted to Venezuela could not be justified because the countries’ agreement did not cover several vehicle categories.

Turkey’s permit system required importers of electric and plug-in hybrid vehicles to establish 20 service stations across seven regions, employ certified repair staff, operate a Turkish call center with at least 40 workers for each brand, appoint a representative in Turkey and accept government oversight of battery systems.

The panel found that each requirement treated Chinese vehicles less favorably than comparable Turkish vehicles and rejected Ankara’s argument that the system was needed to enforce consumer protection and vehicle approval rules.

The dispute has attracted attention because Turkey and Chinese carmaker BYD signed a deal in 2024 for a $1 billion factory in the western province of Manisa with an annual capacity of 150,000 vehicles and up to 5,000 jobs.

BYD put the project on hold while shifting its focus to a factory in Hungary, company Executive Vice President Stella Li told Reuters in June.

Turkey suspended BYD’s access to incentives at the start of the year because the project had not progressed, although the investment agreement and the company’s guarantees remained valid, Industry and Technology Ministry officials said.