The EU has confirmed that it will increase tariffs on Chinese electric vehicles (EVs) to as much as 45.3%.
This follows a long-running probe into Chinese subsidies which resulted in the European Commission (EC) proposing the tariffs earlier this year.
In October, the EC said it had received “the necessary support” from EU nations to implement these proposals.
However, this support was not unanimous, with Euronews reporting at the time that only 10 nations had voted in favour of it, with five voting against, including Hungary and Germany; 12 abstained.
The rise in duties on EV imports were “formally approved and published in the EU's Official Journal on Tuesday”, Reuters reports. They will take effect from today (Wednesday 30 October).
Protection
The extra tariffs will range from 7.8% for US firm Tesla to 35.3% for China’s SAIC.
However, these increased EV-specific tariffs come on top of the EU’s standard 10% duty rate for car imports.
The EC has said the move was necessary due to China having spare production capacity of around three million EVs per year, which it says is twice the size of the EU market.
Europe was particularly exposed as the US and Canada have already introduced 100% tariffs on Chinese EVs.
Chinese response
China has already filed a lawsuit against the EU to the WTO’s dispute settlement mechanism and has said that it “does not accept” the new tariffs, according to CNBC.
“China has repeatedly pointed out that the EU’s anti-subsidy investigation on Chinese EVs has many unreasonable and non-compliant aspects, and is a protectionist practice of ‘unfair competition’,” the Chinese Commerce Ministry has said.
In response, China has enacted duties on European brandy imports and launched new probes into the dairy and pork sectors.
Fraught negotiations
Despite the tariff hike, talks are thought to be ongoing between the EU and China to resolve the dispute, with the two parties looking to agree minimum price commitments from Chinese producers to avert the risk of cheap EVs being dumped on the European market.
However, tensions are high between them, with the French government saying it will directly confront China over its retaliatory tariffs.
A French diplomat told Politico yesterday that Sophie Primas, the country’s junior minister for trade, will raise the issue with her counterpart, Wang Wentao, during a visit to Shanghai.
“The political nature of these investigations is clear,” said the diplomat.