Tariffs on Chinese electric vehicles in the European Union to be raised to 38%

The European Union has taken a significant step in the ongoing trade dispute with China by announcing an increase in tariffs on Chinese electric vehicles. This move is a response to concerns over Beijing’s subsidies for exported vehicles that are believed to be negatively impacting European automakers.

Under the new plan outlined by the European Commission, provisional tariffs will be implemented, resulting in Chinese automakers facing additional duties of up to 38%, a significant jump from the current 10% rate. If discussions with Chinese authorities do not lead to a resolution, these new rates will be put into effect by July 4.

The focus on electric cars as a trade issue underscores the broader problem of what Brussels views as unfair state support for green technology exports from China. The surge in imports of Chinese-made EVs into the European Union has been particularly concerning, especially with well-established Western brands like Tesla and BMW also manufacturing vehicles in China.

Chinese automakers such as BYD and SAIC have been gaining market share in Europe, which has raised worries about undercutting European car brands on price due to Beijing’s substantial subsidies. The EU’s investigation into China’s EV subsidies revealed unfair subsidization in the battery electric vehicle value chain, posing a threat of economic injury to EU producers.

The increased tariffs will be applied on a company-specific basis, with BYD facing an additional 17.4% charge, Geely (owner of Volvo) subjected to a further 20% duty, and SAIC hit with a 38.1% increase. In response, Chinese authorities have labeled the EU’s actions as protectionism and have vowed to take necessary measures to protect their rights and interests.

The United States, under President Joe Biden, has also taken steps to address the issue of Chinese subsidies by imposing new tariffs on various products, including electric vehicles, batteries, and solar cells. This action reflects a growing global concern over unfair trade practices and aims to level the playing field for all manufacturers in the automotive industry.