Slight Downward Adjustment from Plan
'Separate Decision Expected for 5-Year Implementation'
The European Union (EU) will impose tariffs of up to 47.6% on Chinese electric vehicles starting from the 5th (local time).
On the 4th, the European Commission announced that it had set the provisional countervailing duty rates on Chinese electric vehicles at 17.4% to 37.6% based on the results of its anti-subsidy investigation. As the investigation results were published in the EU Official Journal on the same day, the tariffs will take effect from the 5th.
The provisional countervailing duties will be applied in addition to the EU's existing 10% tariff. Accordingly, the tariff rates will increase from a minimum of 27.5% to a maximum of 47.6%.
This is slightly lower than the provisional tariff rates (17.4% to 38.1%) that the Commission had pre-announced about three weeks ago.
The Commission explained that it reflected the opinions submitted by stakeholders after the preliminary disclosure.
The additional tariff rates vary depending on the cooperation in the investigation and the manufacturer.
BYD will face an additional 17.4 percentage points, Geely 19.9 percentage points, and Shanghai Automotive Industry Corporation (SAIC) 37.6 percentage points in tariffs.
Chinese electric vehicle companies that cooperated with the investigation will be subject to an average additional tariff of 20.8 percentage points.
For the remaining Chinese electric vehicle companies that did not cooperate with the investigation, a uniform additional tariff rate of 37.6 percentage points will be imposed.
Foreign manufacturers that are not Chinese companies but have factories locally and export to the EU are also subject to these tariffs.
Among them, Tesla has requested an individual tariff rate assessment from the EU and is undergoing a related investigation, so the finalized tariff rate will be announced once determined.
This provisional countervailing duty, which is a temporary measure, will be applied for four months from the 5th until November.
During this period, the 27 EU member states will vote on whether to convert it into a definitive tariff for five years.
For the definitive tariff to be implemented, at least 15 countries representing 65% of the total EU population (55% of EU member states) must vote in favor. The same applies to blocking the measure.
Within the EU, opinions among member states are divided due to concerns over escalating trade conflicts with China and retaliatory measures, making the approval uncertain.
Since the EU and China are currently negotiating, there is a possibility that the additional tariff rates may be lowered if the definitive tariffs are applied. In fact, some progress has reportedly been made during recent negotiations.
At a regular briefing on the same day, He Yadong, spokesperson for the Chinese Ministry of Commerce, stated, "On the 22nd of last month, Minister of Commerce Wang Wentao and Valdis Dombrovskis, the EU Executive Vice-President, held a video conference and initiated negotiations on properly handling this matter based on facts and rules. So far, China and the EU have held several rounds of negotiations at the technical level."
He also said, "There are still four months left until the final decision. We hope that the EU will show sincerity in facing China and push negotiations forward so that a mutually acceptable solution can be reached as soon as possible."
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