EU Imposes Up to 48% Tariffs on Chinese EVs

The European Union (EU) has decided to impose provisional tariffs on electric vehicle (EV) imports from China, escalating trade tensions with Beijing. 

Announced on July 4, findings from the EU’s anti-subsidy investigation revealed that China’s subsidies to its EV industry harm European automakers. In turn, this will result in tariffs of up to 48%.

Notably, SAIC Motor, which also owns the MG Motor brand, will face a 37.6% tariff, whilst Geely will be levied with 19.9%. Chinese NEV-making giants BYD, on the other hand, are subjected with a 17.4% tariff instead. Other cooperating Chinese EV producers will incur a 20.8% duty, while non-cooperative companies face a 37.6% levy. 

Valdis Dombrovskis, Executive Vice President of the European Commission, emphasised the need for a solution that addresses EU concerns and complies with World Trade Organization (WTO) rules. China has threatened retaliation, including an anti-dumping probe on pork imports and potential tariffs on European agricultural goods, aviation, and cars with large engines. 

The EU and China are in ongoing discussions, aiming for a resolution that adheres to WTO rules and addresses the identified subsidies. Beijing has proposed delaying or reducing the provisional measures and adjusting rates if negotiations progress before Nov. The EU, however, prefers to establish a common understanding before agreeing on a solution.

Technical talks will resume shortly, with the provisional duties introduced by guarantee and collected only if definitive duties are imposed. The tariffs are estimated to reduce Chinese EV imports by a quarter, valued at approximately US$4 billion. 

European automakers, including Mercedes-Benz and Volkswagen Group, oppose higher tariffs, noting China’s significance as a market for Mercedes, VW, and BMW. Geely and BYD declined to comment on the new tariffs, and SAIC did not respond immediately. 

This move by the EU marks a significant escalation in trade relations with China, highlighting the complexities of balancing protectionist measures with global trade dynamics. KR

Source: Automotive News Europe