Tariffs on Chinese electric cars in the EU will be in place for at least four months

From this Friday, electric vehicles manufactured in China will have to pay tariffs ranging from 17.4% to 37.6% when entering the EU, in addition to the existing 10% tariff. This is the largest trade defence measure adopted by the Union so far and will be in force for four months. At the same time, Brussels is negotiating with Beijing to find a solution that does not involve – or not only – an increase in customs tariffs. And which also serves to close a dispute that began in October, when the European Commission decided to open an investigation into electric car manufacturers in China to find out if they received subsidies that distort competition: The first conclusion was that yes, and that is why the tariff increase has come..

This provisional measure will have to be voted on by the Member States in the EU Council, but the result of the vote will not be binding on the Commission. However, it will give clues to the internal cohesion and the strength that Brussels has to negotiate with Beijing during the four months remaining in the process – until November – to find the definitive solution, which does not necessarily have to involve raising customs duties, as stated by the Vice-President of the Commission and responsible for Trade, Valdis Dombrovskis: “Tariffs, in a certain sense, are not the only possible outcome of this investigation. There are other ways, such as eliminating this trade distortion.”

The figures released on Thursday slightly correct some of those announced on June 12, when the parties affected by the investigation were informed of how much tariffs were expected to rise. In the case of the manufacturer SAIC, which is subject to the highest tariff, it remains at 37.6%, when three weeks ago it had been said that it would be 38.1%. Geely’s tariff is also reduced slightly, from 20% to 19.9%. For BYD, the world’s largest manufacturer of this type of vehicle, there are no changes. The basic criterion for this distinction has been whether or not they have collaborated in the investigation and to what degree they have done so. The modifications have been made after listening to the interested parties, the Commission has justified. The data explained will differ for Tesla, which “after a justified request, may receive an individually calculated duty rate in the definitive phase,” says the Executive of the Union.

China reiterated its “firm opposition” to the investigation on Thursday and called for friction to be managed “through dialogue and consultation,” said He Yadong, spokesman for the Chinese Ministry of Commerce, in a statement. He recalled that two weeks ago his Minister of Commerce, Wang Wentao, held a video conference with Valdis Dombrovskis, executive vice president of the Commission, in which they agreed to begin consultations on the case. To date, “several rounds” of “technical level” have been held. The spokesman expressed Beijing’s desire to reach a solution acceptable to both parties. “There are still 4 months before the final ruling. We hope that the EU will collaborate with China to reach an agreement.”

The Asian giant knows that it has that margin to convince a majority of European countries – at least 14 Member States – to reverse the new taxes in the November vote. And it is aware that, so far, some countries have shown this rejection more explicitly than others, such as Germany, and the representatives of its all-powerful motor industry. The aforementioned spokesman has expressed Beijing’s wish that the EU “seriously listen” to these voices.

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