Vote Scheduled for the 4th
46.3% 'Tariff Bomb' Unless 65% Oppose
The European Union (EU) is approaching the 'D-Day' vote to impose a maximum 46.3% tariff 'bomb' on Chinese electric vehicles. On the 4th (local time), EU member states will vote on imposing tariffs on Chinese electric vehicles.
According to foreign media reports including the European edition of Politico on the 3rd, Germany is known to plan to cast a dissenting vote against the introduction of tariffs on Chinese electric vehicles.
Germany previously abstained in the preliminary vote on the EU Commission's proposal to impose tariffs in July. However, the German automotive industry has since been continuously pressuring the German government to vote against the tariffs.
German automakers are concerned that China, a key trading partner, will retaliate. Last year, German automakers earned one-third of their total sales from the Chinese market. If tariffs are imposed, German companies producing electric vehicles in China will also face high tariffs, and if China retaliates targeting European car companies, they will suffer a double burden.
The German Metalworkers' Union (IG Metall) and representatives of major automakers issued a statement saying, "Tariffs will not improve the competitiveness of the European automotive industry," and argued that Germany should cast a dissenting vote against the tariffs.
Spain is also opposed to imposing tariffs on Chinese electric vehicles. According to major foreign media reports, Carlos Cuerpo, Spain's Minister of Economy, sent a letter to Valdis Dombrovskis, the EU Executive Vice-President for Trade, stating that the EU should continue negotiations instead of imposing tariffs, aiming to reach an agreement on price negotiations and relocating battery production within the EU. Minister Cuerpo added, "We must strike the right balance technically and politically," and "Only then can we defend industrial interests and avoid large-scale confrontations with strategic actors like China." Spanish Prime Minister Pedro Sanchez has also urged the EU Commission to reconsider the tariff plan.
Earlier, the EU Commission notified plans to impose tariffs of 17-36.3% on Chinese electric vehicles based on the anti-subsidy investigation results and the provisional countervailing duty vote by member states. Adding the existing 10% tariff, the final tariff rate will reach 27-46.3%. The vote was originally scheduled for the 25th of last month but was postponed to the 4th due to negotiations between the EU and China. China is conducting last-minute persuasion efforts by contacting individual member states.
Since starting the anti-subsidy investigation last year, the EU has argued that Chinese electric vehicles, supported by government subsidies, are being imported in large quantities at low prices and must be stopped. According to the EU Commission, the registration rate of Chinese electric vehicles in the EU market surged from 3.5% in 2020 to 27.2% in the second quarter of this year. The market share of Chinese brand electric vehicles jumped from 1.9% to 14.1% during the same period.
If 15 or more member states representing 65% of the EU population do not oppose in this vote, the tariffs will be imposed as originally planned.
However, foreign media predict that the tariffs are likely to be imposed as planned. France, Greece, Italy, and Poland are known to support the tariff imposition plan, and these countries represent 39% of the EU population. French President Emmanuel Macron expressed support for additional tariffs the day before.
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