The European Union has decided to increase tariffs on Chinese-built electric vehicles (EVs) to as much as 45.3 percent at the end of its highest profile trade investigation that has divided Europe and prompted retaliation from Beijing.
Just over a year after launching its anti-subsidy probe, the European Commission will set out extra tariffs ranging from 7.8 percent for Tesla to 35.3 percent for China’s SAIC, on top of the EU’s standard 10 percent car import duty.
The extra tariffs were formally approved and published in the EU’s Official Journal on Tuesday, meaning they will take effect on Wednesday.
The commission, which oversees EU trade policy, has said tariffs are required to counter what it says are unfair subsidies including preferential financing and grants as well as land, batteries and raw materials at below market prices.
China’s response
China does not approve of or accept the European Commission’s decision to impose extra tariffs on China-made EVs, a spokesperson with the Ministry of Commerce said Wednesday.
China has repeatedly pointed out that the EU’s anti-subsidy investigation into Chinese EVs is irrational, fraught with numerous non-compliance issues and is a protectionist move under the guise of “fair competition,” said the spokesperson in a statement released on the ministry’s website.
China has already appealed to the WTO’s dispute settlement mechanism over the issue and will continue to take all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises.
Opposition from UK, Germany
According to a report by POLITICO on Tuesday, the British business chief is “open” to revive key trade dialogue with China. Jonathan Reynolds, UK’s secretary of state for business and trade, said that “trade is an area ‘where cooperation is possible with China.'”
Earlier in October, on the sidelines of the International Investment Summit in London, Reynolds told reporters that the UK has no plans to follow the EU’s decision to impose import duties on Chinese battery electric vehicles.
Germany’s main auto industry group on Tuesday warned that the EU decision to slap hefty tariffs on Chinese electric cars heightens the risk of “a far-reaching trade conflict.”
The extra tariffs are “a step backwards for free global trade and thus for prosperity, job preservation and growth in Europe,” said the German Association of the Automotive Industry’s president Hildegard Mueller.
“The countervailing tariffs increase the risk of a far-reaching trade conflict,” she added, urging further talks as “the door for negotiations remains open.”
In a separate statement, the head of BMW Oliver Zipse said the EU move would “harm the business model of globally active companies, limit the supply of electric cars to European customers and thus slow down decarbonization in the transport sector.”
Negotiation continues
China’s Ministry of Commerce noted that the EU is still willing to continue talks on price commitments for Chinese-made EVs. “China always advocates the resolution of trade disputes through dialogue and consultation, and had made the utmost efforts to this end,” the statement said.
Currently, technical teams from both sides are engaged in a new phase of consultations.
It is hoped that the European side will work constructively with China, following the principles of “pragmatism and balance,” and taking into account each other’s core concerns and strive to reach a mutually acceptable solution as soon as possible to avoid an escalation of trade frictions, according to the spokesperson.