According to Reuters on June 10, the European Commission is expected to announce planned tariffs on Chinese electric vehicles this week as the European Commission questions China’s excessive subsidies for electric vehicle production.
The move is likely to trigger severe criticism and countermeasures from the Chinese side.
Previously, the United States has quadrupled the tariff on Chinese electric vehicles to more than 100 percent, and now, the European Union will also impose import duties on Chinese manufacturers such as Yadi and Geely, as well as Western manufacturers such as Tesla, who export cars from China to Europe, but the tariffs will most likely be much lower than those set by the United States.
The EU will implement interim tariff measures by July 4 at the latest.
However, they can impose retroactive tariffs on imported cars 90 days before this date.
The parties concerned will have three working days to comment on the accuracy of the Committee’s calculations.
The EU investigation will continue until the end of October, when the EU will decide whether to impose final tariffs, which usually last for five years.
Unless EU governments vote overwhelmingly against it, the proposed tariffs will apply.
Analysts expect the tariff to be between 10% and 25%.
According to 2023 trade data, every 10 per cent increase in tariffs on top of the existing 10 per cent tariff will cost EU importers of Chinese electric cars about $1 billion, which is undoubtedly a blow to China’s auto industry.
This cost will rise this year as Chinese electric carmakers expand their exports to Europe.
To avoid the impact of tariffs, Chinese electric car manufacturers and suppliers have begun to invest and produce in Europe.
Western carmakers Tesla, Renault Dacia and BMW have been importing Chinese-made electric cars into Europe, while the European Commission predicts that Chinese brands account for 8 per cent of electric vehicles sold in the EU, up from less than 1 per cent in 2019, or 15 per cent by 2025.
China’s current exports to Europe include the BYD plus (known in Europe as Atto 3), SAIC MG and Geely Volvo.
The European Commission says the prices of models made in China are usually 20% lower than those made in the European Union.
BYD Yuan plus.
Photo Source: BYD, nevertheless, the European auto industry has little support for EU tariffs.
Executives at BMW, Mercedes-Benz and Volkswagen have all warned against imposing import duties on cars from China.
Executives of established European automakers believe that higher tariffs may temporarily reduce or eliminate the cost advantage that Chinese carmakers gain from the supply chain, Reuters reported.
but that does not stop Chinese low-cost electric vehicles from continuing to dominate the European market and may even force European carmakers to adjust their business.
Carlos Tavares, chief executive of Stellantis, said European carmakers “do not have much time” to adjust their operations and that Europe needs to eliminate differences and uncertainties in national policies, regulations and subsidies for electric vehicles, as well as its internal efficiency and flexibility in decision-making, implementation and innovation.
Among EU governments, France said Europe needed to protect itself from Chinese car production subsidies, while German Chancellor Olaf Scholz did not see the need to impose tariffs.
HSBC estimates that German carmakers account for 20% of their global profits in the Chinese market, so they rely heavily on sales in China, fearing that the Chinese will take countermeasures later.
But European Commission President Ursula Ursula von der Leyen has repeatedly said Europe needs to take action to prevent China from flooding the EU market with subsidised electric cars.
China believes that the countervailing investigation is not in line with the relevant WTO rules, and has severely criticized the EU, urged EU cooperation, and lobbied individual EU countries.
On the issue of tariffs, the Chinese government has always adhered to an open and cooperative attitude and is committed to maintaining the stability of the global industrial chain supply chain.
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