The EU will impose additional tariffs on Chinese electric vehicles (EVs), after a key vote today (4 October).
The European Commission (EC) said its proposal had received “the necessary support” from EU member states.
“In parallel, the EU and China continue to work hard to explore an alternative solution that would have to be fully WTO-compatible, adequate in addressing the injurious subsidization established by the Commission's investigation, monitorable and enforceable.”
The votes are not publicly available, but Euronews reported that only 10 nations were in favour, while five (including Germany and Hungary) voted against and 12 abstained.
The EC used its powers to break the deadlock and ensure the measures passed, as technically the body had neither approved nor rejected the proposal.
October deadline
European authorities now have until 30 October to publish the regulations, including the definitive findings of the anti-subsidy investigation.
Commission figures had long argued that China was illegally supporting its domestic industry and producing low-cost exports that harmed European domestic industry. China has rejected these allegations.
The decision to impose additional tariffs follows weeks of diplomatic wrangling and furious pushback from Beijing. Several major European leaders suggested that they might oppose the measures and China has launched several investigations into European dairy and meat sectors.
Before the vote, Hungarian prime minister Victor Orban warned of an “economic Cold War” if the measures went through. Spanish PM Pedro Sánchez also urged the EU to reconsider the decision.
Rates
As there is already a 10% rate in place, some manufacturers could face tariffs of over 45%.
The rates to be imposed on individual manufacturers are as follows:
- BYD: 17.0%
- Geely: 19.3%
- SAIC: 36.3%
- Other cooperating companies: 21.3%
- All other non-cooperating companies: 36.3%
Tesla obtained an individual rate of 9% following engagement with the EC.
Tariff globally
The US has also imposed tariffs on Chinese EVs recently, with US President Joe Biden announcing rates as high as 100% earlier this year. The UK has not announced any tariffs.
Speaking to the Daily Update in June, Society of Motor Manufacturers and Traders’ (SMMT) CEO Mike Hawes said that the EU and US were taking different approaches to dealing with China’s EV industry.
Hawes said that the 100% US tariff was “pretty much saying we don’t want your vehicles here […] but Europe is not saying that”.
“Europe is trying to say, ‘You can access our market, but we’re trying to level the playing field – your companies have had a degree of support that ours have not.’
“There are rights and wrongs of that, but [the EU have] had a long investigation with lots of evidence and that’s the conclusion they’ve drawn. Now, Brussels and China are having a dialogue on [the tariffs’] appropriateness, which is good.”
In addition to EVs, many nations – including Brazil, Chile and Malaysia – have launched dumping investigations over the past year into Chinese products such as steel.
