The European Commission is introducing import tariffs on electric cars imported from China from 4 July. The tariffs vary by brand and can be as high as 38.1 per cent. These are in addition to the existing import duties of 10 per cent, bringing the total levy to 48.1 per cent.
The Commission announced an investigation into Chinese-made electric vehicles (EVs) back in October. Based on this investigation, it concluded that Chinese manufacturers receive state aid in many cases, resulting in unfair competition.
Tariffs vary by brand
The import tariffs introduced by the European Commission vary by brand. Chinese brands that cooperated with the investigation and are not granted a loose import tariff will be imposed an average import duty of 21 per cent. Brands that did not want to cooperate get an import duty of 38.1 per cent imposed.
The three biggest Chinese brands - BYD, Geely (Volvo, Polestar & Lynck & Co.) and SAIC (MG) - will be subject to the following tariffs:
- BYD- 17.4 per cent
- Geely - 20 per cent
- SAIC - 38.1 per cent
Impact on non-Chinese manufacturers too
The tariffs also apply to EVs from non-Chinese manufacturers who produce these vehicles in China and then bring them into the EU. These include Mercedes and Renault.
Tesla is another example. The US carmaker recently asked the European Commission for an exception to the tariffs. It is still unclear whether the European Commission will go along with this.
Opinions within the EU divided
Within the EU, opinions on the import tariffs are divided. The Financial Times reports that Spain and France in particular have lobbied for the duties. At the same time, Germany, Hungary and Sweden are said to be opposed to the import tariffs. The countries fear that China will come up with retaliatory measures. These fears are not unfounded; the Chinese government has previously indicated that it will strike back if the EU introduces import duties.
In a reaction to the import tariffs, China's Ministry of Commerce says it is "very concerned and dissatisfied", referring to an "ill-informed and lawless" action by the EU. It says it will take 'all necessary measures' to protect the rights of Chinese companies. Chinese authorities also accused the European Commission of protectionism, and denied providing subsidies to Chinese EV manufacturers.
Chinese anti-dumping investigations launched
Chinese authorities seem to be not letting grass grow on retaliation; Bloomberg reports today that the Chinese government has launched an anti-dumping investigation into European pork. China imports over €2.8 billion worth of pork from the EU on an annual basis.
An investigation into European milk products is also expected to follow shortly. Exports of European milk products to China amount to some €1.7 billion on an annual basis. The European Commission has already indicated that it will ensure that the investigation follows World Trade Organisation (WTO) rules.
Author: Wouter Hoeffnagel
Image: Gerd Altmann via Pixabay
