China Condemns EU Electric Vehicle Tariffs as "Protectionism"... Possible Retaliation?

Up to 48% Tariffs... "Politicization of Economic Issues" Criticism
EU Considers Tariff Measures on Alcohol, Cars, Meat, and Dairy Products

The European Union (EU) decided to impose additional tariffs of up to 38.1% on Chinese electric vehicles, prompting China to protest, accusing the EU of wielding "protectionism."

On the 12th (local time), the European Commission announced a provisional decision to impose additional provisional tariffs ranging from 17.4% to 38.1% based on its anti-subsidy investigation into Chinese electric vehicles. Since the EU already imposes a 10% tariff on Chinese electric vehicles, the maximum tariff could reach 48.1%.

BYD vehicles waiting to be loaded for export at Lianyungang Port, Jiangsu Province, China
[Image source=Reuters Yonhap News]

Immediately after the European Commission's announcement, the Chinese Ministry of Commerce issued a statement through a spokesperson expressing "deep concern and strong dissatisfaction." The statement criticized, "The European Commission holds the banner of 'green development' in one hand while wielding 'protectionism' with the other," adding, "This measure not only undermines the legitimate rights and interests of China's electric vehicle industry but also disrupts and distorts the global automotive industry and supply chains, including those in the EU."

It further urged, "China calls on the EU to promptly correct its wrongful practices, effectively implement the important agreements reached at the recent China-France-EU trilateral summit, and properly handle economic and trade frictions through dialogue and consultation." The statement added, "China will closely monitor follow-up actions and resolutely take all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises."

Lin Zhen, spokesperson for the Chinese Ministry of Foreign Affairs, said at a briefing the previous day, "We want to emphasize that this anti-subsidy investigation is a typical case of protectionism that will ultimately harm Europe's own interests." He added, "Protectionism has no future; openness and cooperation are the right path. China will take all necessary measures to firmly protect its legitimate rights and interests."

The China Association of Automobile Manufacturers expressed deep regret and declared its rejection of the measure. The association stated, "During the investigation process, the European side tended to preset the investigation results and select sample companies, abused its investigative authority, arbitrarily expanded the scope, and seriously distorted the investigation results." It also hoped that "the European Commission would not politicize economic and trade issues or abuse trade remedy measures."

China is expected to take retaliatory measures against the EU's tariff imposition. Earlier this year, China initiated an anti-dumping investigation on imported brandy such as French Cognac. Last month, the Chinese automotive industry urged an increase in tariffs on imported vehicles equipped with engines larger than 2500cc in response to the EU tariffs.

The Chinese state-run English media Global Times cited experts saying that China has not publicly announced how it will respond to the tariff imposition but has several options. According to the report, the Chinese industry plans to submit an application to authorities to initiate an anti-dumping investigation on certain EU pork products. Additionally, some companies plan to request the initiation of anti-subsidy investigations on some EU dairy imports.