EU: punitive tariffs on Chinese electric cars. On the threshold of trade "wars" with China

The European Union said on Wednesday it plans to impose additional tariffs of up to 38% on imports of Chinese electric vehicles from next month following an investigation into cracking down on subsidies.

The European Commission has concluded that the battery electric vehicle (BEV) value chain in China benefits from unfair subsidies that threaten BEV manufacturers in EU financial damage. “If negotiations with the Chinese authorities do not lead to an effective solution, temporary countervailing duties will be introduced,” – added to the commission.

The tariffs will apply temporarily from July 4 and permanently from November unless a majority of EU member states (15 countries representing at least 65% of the union's population) vote against the move.

European Commission announced a temporary increase in tariffs on Chinese manufacturers: 17.4% for BYD, 20% for Geely and 38.1% for SAIC Motor.

Other electric vehicle makers in China that cooperated with the commission but were not selected for the sample will face an average tariff of 21%.

China reacted sharply to the EU statement. Chinese Foreign Ministry spokesman Lin Jian called EU measures “typical protectionism”. Lin emphasized that additional tariffs “violate the principles of a market economy and the rules of international trade”adding that China will take all necessary measures to protect its interests.

Germany, which exports a significant portion of its products to China, has expressed concern about the impact of the new tariffs. German Economics Minister Robert Habeck is due to travel to China next week to find a solution. The German auto industry is heavily dependent on the Chinese market: in 2023, almost a third of its sales will come from China.

Meanwhile, Chinese companies have filed a request for an anti-dumping investigation into EU pork imports, suggesting the trade dispute could spread to other sectors.

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