Brussels has decided to increase customs duties on Chinese electric vehicles in order to protect its local industries and counter Beijing’s perceived unfair subsidies. This decision could trigger major trade repercussions.
After nine months of investigation, Europe has made its decision. On Wednesday June 12, the European Commission announced its intention to impose additional tariffs on imports of Chinese electric vehicles, a decision that could trigger major trade repercussions with Beijing.
The new tariffs, which will range from 17.4% to 38.1%, target major Chinese manufacturers such as BYD, Geely, and SAIC (owner of the MG brand). These customs duties will be added to the current 10% tax, while the Chinese impose 15% taxes on European car imports.
This decision follows the investigation launched by Commission President Ursula Van der Leyen last September.
“The battery-electric vehicle value chain in China benefits from unfair subsidies, posing a threat of economic harm to EU manufacturers,” the Commission said.
Tariffs for the three main Chinese manufacturers will be precisely 17.4% for BYD, 20% for Geely and 38.1% for SAIC. The other manufacturers will be subject to an average duty ranging from 21% to 38.1%.
Brussels made it clear, however, that the decision adopted on Wednesday is “provisional”. Commission Vice-President Margaritis Schinas has “been in contact” with the Chinese authorities to “explore possible ways of resolving the problem”. Failing a solution, the new duties will come into force on July 4.
Germany concerned
By introducing these new taxes, Brussels hopes to protect an industry employing 14.6 million people in the EU, while avoiding a potentially disastrous conflict with its second-largest economic partner after the USA. But the decision is not unanimously supported. Germany, which maintains close trade relations with China, is voicing its concerns about this potential “trade war”.
German Transport Minister Volker Wissing warned of the consequences for German automakers, 35% of whose sales are made in China, thanks in particular to Volkswagen, BMW and Mercedes.
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Featured photo : © BYD
