EU slaps steep tariffs on Chinese electric cars

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Brussels is seeking to protect the bloc’s auto industry from “unfair” competition

The European Union has imposed steep new tariffs on electric vehicles imported from China following an anti-subsidy probe. Brussels is seeking to stem a flood of low-priced EVs from the Asian economic superpower to protect its own manufacturers.

The provisional extra duties of up to 38% will apply from July 5 for a maximum duration of four months, according to a press release issued by the European Commission on Thursday.

Car maker BYD will be subject to a 17.4% tariff, while Geely, which owns Sweden’s Volvo, is facing a 19.9% tariff. Other car makers that cooperated with the investigation will face an average duty of 20.8%. The duty for other non-cooperating companies will be 37.6%, the release states.

The measures are in addition to the current 10% tariff levied on all electric cars imported from China.

The decision comes nine months after European Commission President Ursula von der Leyen announced an investigation into a flood of cheap Chinese cars entering the bloc. Based on the results of the probe, the Commission concluded that the battery electric vehicles (BEV) “value chain” in China benefits from “unfair subsidization,” which is causing a “threat of economic injury” to EU car makers.

A definitive decision on the tariffs is due by November, while talks will continue between Brussels and Beijing in a bid to resolve the issue.

When the plans for new EV duties were announced last month, China’s commerce ministry warned that the EU could trigger a “trade war” if it continues to escalate tensions. Beijing also accused the bloc of unfair practices during its anti-subsidy probe, and responded by launching an anti-dumping investigation in relation to certain pork products from the EU.

The EU is the largest overseas market for Chinese EV makers. While Chinese imports into Europe have largely been dominated by Tesla, Dacia and BMW cars produced there, Brussels-based green group Transport and Environment (T&E) has projected that Chinese brands could reach 11% of the European EV market in 2024, and 20% in 2027.

Chinese automakers have actively penetrated foreign markets in recent years and are steadily closing the gap with Western rivals, particularly in terms of electric cars.

The EU’s move comes after the US raised its tariff on Chinese EVs from 25% to 100% in May.

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