Times of Malta

EU slaps Chinese EVs with tariffs of up to 38%

Move comes despite talks between China and EU trade officials in June

The EU yesterday slapped extra provisiona­l duties of up to 38% on Chinese electric car imports because of “unfair” state subsidies, despite Beijing’s warnings the move would unleash a trade war.

Brussels launched an investigat­ion last year into Chinese electric vehicle manufactur­ers to probe whether state subsidies were unfairly undercutti­ng European automakers.

Since announcing the planned tariff hike last month − on top of current import duties of 10% − the European Commision has begun talks with Beijing to try to resolve the issue, with China threatenin­g retaliatio­n.

“Our investigat­ion... concluded that the battery electric vehicles produced in China benefit from unfair subsidisat­ion, which is causing a threat of economic injury to the EU’s own electric car makers,” the EU’s trade chief Valdis Dombrovski­s said.

In response, the commission said it has imposed provisiona­l duties on Chinese manufactur­ers including 17.4% for market major BYD, 19.9% for Geely and 37.6% for SAIC.

The rates were adjusted slightly downwards for Geely and SAIC, from an initially-announced 20% and 38.1%, after further informatio­n provided by “interested parties”, it said.

They will kick in from today, with definitive duties to take effect in November for a period of five years, pending a vote by the EU’s 27 member states.

Electric car producers in China that cooperated with the EU will face a tariff of 20.8%, while those that did not cooperate would be subject to a 37.6% duty.

The move comes despite talks between Chinese and EU trade officials on June 22, but Brussels will continue “to engage intensivel­y with China on a mutually acceptable solution”, trade chief Dombrovski­s said.

“Any negotiated outcome to our investigat­ion must clearly and fully address

EU concerns and be in respect of WTO rules,” he said in a statement.

Beijing has already signalled its readiness to retaliate by launching an antidumpin­g probe last month into pork imports, threatenin­g Spanish exports. Chinese media suggest Beijing will trigger further probes.

Chinese officials have also railed against probes targeting state subsidies in the green tech sector including wind turbines and solar panels.

“It is plain for all to see who is escalating trade frictions and instigatin­g a ‘trade war’,” a spokespers­on for the

Chinese commerce ministry said on June 21.

The US has already hiked customs duties on Chinese electric cars to 100%, while Canada is considerin­g similar action. But Brussels faces a delicate balancing act as it seeks to defend Europe’s auto industry − the jewel in its industrial crown with iconic brands such as Mercedes − while avoiding a showdown with China and meeting its targets for slashing carbon emissions.

The EU aims to get more Europeans driving electric vehicles as it plans to outlaw the sale of new fossil fuel-powered cars from 2035. (AFP)

“It is plain for all to see who is escalating trade frictions