EU Raises Tariffs on Chinese Electric Vehicles... 38.1% if Non-Cooperative

The European Union (EU) is pushing to raise tariffs on Chinese electric vehicles from the current 10% to an average of around 21%.

According to major foreign media on the 12th (local time), the EU is advancing a plan to increase tariffs on Chinese electric vehicles from the current 10% to an average of about 21%, citing that Chinese EVs receive excessive subsidies that distort market competition.

Starting next month, countervailing duties will be applied as a temporary measure, and if approved by the 27 EU member states in the second half of this year, the implementation will be confirmed for the next five years.

The European Commission, the EU's executive branch, announced in a press release after the weekly meeting of the College of Commissioners that it has notified Chinese authorities of its plan to provisionally impose an average countervailing duty of 21% on Chinese EV companies that cooperated with the investigation.

BYD, Geely, and Shanghai Automotive Industry Corporation (SAIC) have been assigned individual tariff rates of 17.4%, 20%, and 38.1%, respectively. For other Chinese EV companies that did not cooperate with the investigation, a uniform tariff rate of 38.1% will be imposed.

The EU reached this provisional conclusion about eight months after launching an anti-subsidy investigation last October, citing that low-priced Chinese EVs excessively subsidized by the Chinese government are distorting the internal market. The Commission stated, "It has provisionally concluded that the entire supply chain of Chinese battery electric vehicles (BEVs) benefits from unfair subsidies, which poses an economic harm threat to EU BEV manufacturers."

If an effective resolution is not reached with Chinese authorities, the Commission plans to apply the countervailing duty rates to the relevant companies starting July 4. However, since this measure is a preliminary conclusion, tariffs will be applied temporarily, but actual collection will begin only when the definitive tariffs are imposed.

For the countervailing duty measure to be finalized, it must be approved by a qualified majority vote of the 27 member states by November. Chinese electric vehicles sold within the EU are generally known to be about 20% cheaper than European-made vehicles.