European import tariffs on Chinese-made electric vehicles (EVs) have come into force. With the import tariffs, the European Commission wants to create a level playing field in the EV market. It argues that unfair state aid makes Chinese EVs significantly cheaper than European counterparts.
The import tariffs were announced last month and came into force last week. The tariffs range from 17.4% to 38.1%. They come on top of existing 10% import tariffs that have long applied to Chinese EVs. In total, this will see the EU levy up to 48.1% duties on EVs imported from China.
Tariffs vary
The amount of the import tariff imposed on a brand depends on several factors. For instance, the European Commission may impose a specific tariff on a Chinese manufacturer. If not, the tariff depends on the cooperation an EV manufacturer gave during the commission's investigation into Chinese state aid. Manufacturers that cooperated with this investigation and do not have a loose tariff imposed will be subject to an average import duty of 21 per cent. However, brands that did not want to cooperate face an import duty of 38.1 per cent.
The three biggest Chinese brands - BYD, Geely (Volvo, Polestar & Lynck & Co.) and SAIC (MG) - are subject to the following tariffs:
- BYD - 17.4 per cent
- Geely - 20 per cent
- SAIC - 38.1 per cent
The import tariffs are not yet final, by the way; this is a preliminary decision. EU member states still have to consider the plan, which they are expected to do in the coming months.
China is critical
The Chinese government is not happy with the European measures. It denies that Chinese EV manufacturers are receiving unfair state support. The Chinese Ministry of Commerce now claims to have held several talks with the European Commission on the import tariffs, Reuters reports.
China also points to criticism from within the EU of the imposed import tariffs. For instance, several EU member states are not happy with the import tariffs. For instance, Germany, Hungary and Sweden are said to have actively lobbied against the European duties, the Financial Times reported earlier. Among other things, the countries fear retaliatory measures from China. At the same time, France and Spain were actually in favour of the additional duties.
Retaliatory measures
The fears of Germans, Hungarians and Swedes do not seem unfounded. China has repeatedly signalled it will strike back if the EU introduces import tariffs on Chinese EVs. And it is not letting any grass grow on that; Bloomberg already reported shortly after the European Commission announced the import duties that the Chinese government has started an anti-dumping investigation into European pork. China is an important market for European pig farmers; on an annual basis, the EU exports over €2.8 billion worth of pork to the Asian country.
An anti-dumping investigation into European milk products is also expected to follow. China imports some €1.7 billion worth of milk products annually. The Asian country has also launched a similar investigation into European brandy, also known as brandy.
"China hopes that the EU heeds the calls from within the EU, engages with China in a rational and pragmatic manner, and avoids countermeasures that harm the cooperation from which both sides benefit and the joint development of the Chinese-European auto industry," Reuters notes from the mouth of He Yadong, spokesman for China's Ministry of Commerce.
Author: Wouter Hoeffnagel
Photo: Goran Horvat via Pixabay
