The European Union will impose tariffs of up to 37.6% on imports of electric vehicles made in China, EU officials said, ratcheting up tensions with Beijing in Brussels’ largest trade case yet. There is however a four-month window during which the tariffs are provisional and intensive talks are expected to continue between the two sides as Beijing threatens wide-ranging retaliation.
The European Commission’s provisional duties of between 17.4% and 37.6% without backdating are designed to prevent what its president Ursula von der Leyen has said is a threatened flood of cheap EVs built with state subsidies.
The rates, laid out in a 208-page document, are almost the same as those announced by the Commission on June 12. The executive made adjustments after companies identified minor calculation errors in the initial disclosure. Beijing said then it would take “all necessary measures” to safeguard China’s interests.
These could include retaliatory tariffs on exports to China of certain products such as some varieties of liquor and meat. EU trade chief Valdis Dombrovskis said there is no basis for China to retaliate. “Our aim is to ensure fair competition and a level playing field,” he said in an interview with international media. The EU anti-subsidy investigation has nearly four more months to run. At the end of it, the Commission, the EU’s executive arm, could propose definitive duties, typically applying for five years, on which EU members would vote.
“Those talks with China are ongoing and indeed should a mutually beneficial solution emerge, we can also find ways not to apply at the end of the day the tariffs,” Dombrovskis said. “But it is very clear this solution (would) need to solve that market distortion that we are currently having … and it needs to be market compliant.” China’s commerce ministry said both sides have so far held several rounds of technical talks over tariffs on the issue.
“We hope that the European and Chinese sides will move in the same direction, show sincerity, and push forward with the consultation process as soon as possible,” He Yadong, a ministry spokesperson, said. BYD faces duties of 17.4%, Geely 19.9% and SAIC 37.6%, the EU said. These are on top of the EU’s standard 10% duty on car imports. Companies deemed to have cooperated with the anti-subsidy investigation, including western carmakers Tesla and BMW, will be subject to 20.8% tariffs and those that did not cooperate a rate of 37.6%.
