EU announces higher tariffs on Chinese EVs as trade tensions sharpen

EU announces higher tariffs on Chinese EVs as trade tensions sharpen

Employees work on the assembly line of new energy vehicles at a factory of Chinese EV startup Leapmotor on April 1, 2024 in Jinhua, Zhejiang Province of China.

Shi Kuanbing | Visual China Group | Getty Images

The European Union on Wednesday said it would slap higher tariffs on Chinese electric vehicle imports, which it found benefit “heavily from unfair subsidies” and pose a “threat of economic injury” to EV producers in Europe.

On a preliminary basis, the EU Commission, the executive arm of the EU, concluded that the battery electric vehicles value chain in China “benefits from unfair subsidisation” and pronounced that it is in the EU’s interest to impose “provisional countervailing duties” on BEV imports from China.

The additional tariffs are the result of an EU probe that began in October. The duties are currently provisional, but will be introduced from July 4 in the event of unfruitful talks with Chinese authorities to reach a resolution, the EU Commission said in a statement. Definitive measures will be placed within four months of the imposition of provisional duties.

“The influx of subsidised Chinese imports at artificially low prices therefore presents a threat of clearly foreseeable and imminent injury to EU industry,” the Commission noted.

Tariff breakdown

The bloc is imposing a 38.1% tariff on battery electric vehicle (BEV) producers who did not cooperate with its investigation, and a lower 21% duty on carmakers in the Asian country who complied but have not been “sampled.”

Main Chinese BEV producer BYD was struck with a 17.4% tariff, with Geely slapped with a 20% duty. The EU has also imposed its 38.1% tariff on autos firm SAIC. All three producers were sampled in the EU probe, which is ongoing.

Elon Musk’s Tesla, which has a giga factory in Shanghai, may “receive an individually calculated duty rate at the definitive stage,” following a “substantiated request,” the Commission said.

Nio, in response to the EU announcement, said it was pledging an “unwavering” ongoing commitment to the EV market. “We strongly oppose the use of increased tariffs as a strategy to obstruct the normal global trade of electric vehicles. This approach hinders rather than promotes global environmental protection, emission reduction, and sustainable development,” it said.

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