EU plans higher tariffs for Chinese EVs

Wikimedia Commons/CC BY-SA 4.0 Author: Quzhouliulian
A Farizon Xingxiang V from the Geely Auto Group in Hangzhou.

The European Union decided to add new tariffs to Chinese-made electric vehicles (EV) due to what the bloc believes to be unfair disadvantages that Chinese producer benefit from.

The decision was made after preliminary results of an ongoing investigation showed that China gives subsidies to EV producer, distorting the competition and creating an unfair advantage. The EU fears that that imported EV cars hurt European companies as they are able to be sold at cheaper prices compared to European manufacturers.

The European Commission quantified various tariffs hikes for different companies. Of the top three Chinese manufacturers in Europe, BYD will have extra duties of 17.4%, while Geely of 20% and state-owned SAIC 38.1%.

Other companies not mentioned may receive extra tariffs of at least 21% for the companies that cooperated with the investigation and 38.1% for those that didn’t. The measure will also be implemented against Western companies with production facilities in China. In a statement announcing the move, the commission mentioned that US-company Tesla may end up with its own import duty tax.

The decision isn’t final, and the Commission wants to speak with Chinese authorities over a possible resolution of the issue. The new tariffs will enter into effect on July 4. The Chinese Commerce Ministry criticised the measure, saying that it was “a naked act of protectionism, creating and escalating trade friction, and ‘destroying fair competition’ in the name of ‘safeguarding fair competition.”

The lobby group China Chamber of Commerce to the EU warned that China may retaliate with higher duties on European-made cars. This may affect mostly luxury cars produced by German companies like Mercedes-Benz and BMW.

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