EU to raise tariffs on Chinese electric vehicles

Ronit Kawale
Ronit Kawale - Senior Editor
4 Min Read
EU to raise tariffs on Chinese electric vehicles

The European Commission plans to raise duties on imported Chinese electric vehicles to 38 percent from July, further escalating a trade dispute that Brussels sees as an attempt to protect EU manufacturers, Voice of America (VOA) reports.

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The move, which Beijing officials have criticised as “protectionist”, comes less than a month after Washington raised US tariffs on Chinese electric vehicles fourfold to 100 percent.

The EU's executive branch said the decision to raise the duties by nearly four times the current 10 percent level followed multiple investigations – some of which are still ongoing – into whether Chinese green technology producers were dumping government-subsidized goods into EU markets, giving an unfair advantage to Chinese automakers in particular, Voice of America reported.

EU officials also said the new tariffs, which would take effect after dispute-resolution talks end on July 4, are provisional and dependent on the findings of an EU investigation into Chinese manufacturing subsidies, which will be completed on Nov. 2. After that, fixed duties, which typically apply for a minimum of five years, could take effect.

China's Foreign Ministry spokesman Lin Jian described the anti-subsidy investigations as “a typical case of protectionism” at a press briefing on Wednesday. He also warned that these measures disrupt automobile supply chains and will ultimately harm Europe's own interests.

In a statement posted on its official website, Chinese Commerce Ministry spokesman He/Xi Yadong said the tariffs are devoid of “factual and legal basis” and that they serve to “weaponize” “economic and trade issues.”

However, European commissioners have defended the move, citing the findings of an Oct. 4 investigation that found that China’s electric-vehicle supply chain “benefits heavily from unfair subsidies … and therefore an influx of subsidized Chinese imports at artificially low prices presents a clearly foreseeable and imminent threat of harm to EU industry,” VOA reported.

Following the announcement, shares of some of Europe's largest manufacturers selling into the Chinese market, including BMW, fell on Wednesday over fears of Chinese retaliation.

“The European Commission's punitive tariffs have hit German companies and their top products,” German Transport Minister Volker Wissing wrote on X. The post echoes concerns expressed by executives at Germany's two biggest carmakers, Volkswagen and Mercedes-Benz.

“Cars should be cheaper because of more competition, open markets and better business conditions in the EU, not because of trade wars and market isolation,” the post added.

Chinese automakers, on the other hand, seemed less concerned by the move.

“The EU's provisional tariffs are basically in line with our expectations, averaging about 20 percent, which will not have much impact on most Chinese companies,” said Cui Dongshu, secretary general of the China Passenger Car Association.

German government spokesman Steffen Hebestreit welcomed a possible resolution of the dispute through negotiations.

The European Commission said its investigation aims to prevent unfair competition and market distortions and the rates could be applied on a company-by-company basis. Chinese manufacturers who assist the EU investigation will face a 21 percent rate, while uncooperative firms should expect to see a new rate of 38 percent, VOA reports.

Imports of Chinese-made wood flooring, medical equipment, wind turbines and solar panels are also under scrutiny.

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