EU adopts additional tariffs of up to 38% on Chinese electric vehicles

The European Union announced on Thursday the provisional adoption of additional compensatory duties of up to 38% on Chinese companies manufacturing electric vehiclesconsidering that these firms benefit from subsidies “unfair”.

These subsidies represent a “threat of economic damage to European producers“The new tariffs will be applied from July 5,” the European Commission, the EU’s executive arm, said in a statement.

The EU plans to adopt a definitive measure in November, but until then it will hold talks with China in search of a solution, although Chinese authorities have already warned that they will apply retaliatory measures.

The Chinese Chamber of Commerce in the EU (CCCEU) denounced Thursday’s decision as a “protectionist measureThe entity, which represents more than a thousand Chinese companies in the EU, said it felt “deeply disappointed and dissatisfied” for the decision announced this Thursday.

The Chinese Federation of Automobile Manufacturers told AFP that it was a “mistake”, which will likely increase the cost of vehicles”to the detriment of European consumers”.

Chinese electric car company NIO, which produces high-end models, said in a note that it expects the Asian giant and the EU to “come to a solution” to the trade dispute.

Meanwhile, the manufacturer XPeng informed AFP that “will not change its strategy of exploring foreign markets” and he hopes to find “the way to minimize the impact on consumers”.

Models from non-Chinese brands produced in China are also in the spotlight: Tesla Model 3, Mini electric and Volvo EX40, among others.

In its statement, the European Commission pointed out that the adoption of these provisional and additional tariffs is the result of a nine-month investigation.

The research concluded that the value chain of electric cars in China “benefits from unfair subsidies, which is causing a threat of economic harm to EU producers”.

The company has therefore announced the provisional adoption of tariffs of 17.4% for BYD and 19.9% ​​for Geely, as well as customs duties of 37.6% for SAIC.

Other electric car producers in China that cooperated in the investigation are subject to average tariffs of 20.8%, while for companies that did not cooperate the tariffs rise to 37.6%.

In May, the European Commission had already threatened to raise tariffs to 38%, on top of the current 10% import duties.

Hope in dialogue

The move comes despite trade talks between China and the EU on June 22.

According to European Trade Commissioner Valdis Dombrovskis, the EU will continue to “working intensively with China on a mutually acceptable solution”.

“Any negotiated outcome of our investigation must clearly and fully address EU concerns and respect World Trade Organisation rules.“, the official said in a note.

Last month, China launched an investigation into pork imports, threatening Spanish exports.

Chinese officials have also criticized investigations targeting state subsidies in the green technology sector, including wind turbines and solar panels.

The EU is looking to make electric vehicles more widespread as the bloc will ban the sale of new cars powered by fossil fuel engines from 2035.

At the same time, it aims to protect its automobile industry.

But Germany, an automotive powerhouse and major trading partner of China, fears that the high tariffs could trigger retaliation that would hit its activities in the Chinese market.

On Thursday, the German giant Volkswagen rejected the high tariffs announced by the EU, considering them “harmful”.

“The negative effects of this decision outweigh the possible benefits for the European automotive industry and in particular for Germany.“the group said.

Electric vehicles from China account for almost 22% of the European market, compared with 3% just three years ago, according to estimates from the automotive sector.

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