FRANKFURT – The European Union is implementing higher customs duties on electric vehicles imported from China. This move comes as part of a trade dispute over Chinese government subsidies and the increase in green technology exports to the 27-nation bloc. The higher duties will take effect on Friday, pending a final decision in four months. Here are some key points about the EU’s planned customs duties:
After an eight-month investigation, the European Commission found that Chinese companies producing electric vehicles benefit from significant government assistance, allowing them to offer lower prices in the EU and threaten European jobs. The higher duties were announced on June 12 and will go into effect on Friday. The duties are provisional and will only need to be paid if confirmed by a vote of EU governments before November 2.
The EU aims to correct the imbalance through these measures rather than pursue the duties as a long-term goal. Rates for the duties would vary for different companies, with BYD facing a 17.4% duty, Geely 19.9%, and China’s state-owned SAIC 37.6%. Talks have been held between EU and Chinese officials in hopes of reaching a negotiated solution.
The European Commission took action due to a significant increase in Chinese electric car market share in Europe, fueled by unfair subsidies and practices. The EU is concerned about the impact on the European auto industry and the potential loss of jobs. The tariffs aim to level the playing field and prevent unfair competition.
Compared to the U.S., the EU tariffs are not as high, with the Biden administration raising tariffs on Chinese EVs to 100%. The EU aims to maintain affordable electric cars while addressing unfair subsidies. European countries also provide subsidies for electric cars, but the focus is on ensuring fair competition.
Chinese EVs are priced much lower in China compared to Europe, leading to concerns about market distortion and potential price increases in the long term. The impact of the tariffs on consumers and carmakers remains uncertain.
China has criticized the higher duties as protectionism and hopes for a mutually acceptable solution through consultation. The reaction from China and potential responses, such as retaliatory measures or manufacturing in Europe, remain to be seen. Discussions between the EU and China are ongoing to find a resolution.
Overall, the EU’s higher customs duties on Chinese electric vehicles are part of a broader effort to address unfair subsidies and practices in the EV market. Collaboration and negotiation between the EU and China will be crucial in finding a suitable resolution.
