The European Commission is imposing punitive tariffs on certain electric cars from China. The Brussels authority announced this on Wednesday. Models from the manufacturers BYD, Geely and SAIC are affected. An import tariff of 17.4 percent will apply to BYD, 20 percent to Geely and 38.1 percent to Volkswagen’s state-owned Chinese partner group SAIC.
The Commission justified the move by saying that electric car imports from China were damaging the European car industry. It is following the example of the USA, which recently quadrupled its tariffs on Chinese electric vehicles to 100 percent. However, European car manufacturers have clearly spoken out against the tariffs and fear retaliatory measures in their most important single market, China.
The Chinese government had previously warned the EU several times against increasing import tariffs. “Ultimately, this would harm the European Union’s own interests,” said a spokesman for the Foreign Ministry in Beijing on Wednesday. The EU Commission’s ongoing anti-subsidy investigation is “protectionism” and is apparently intended to provide an “excuse” for the introduction of protective tariffs.
The Brussels authority launched a competition investigation against China at the end of 2023 over alleged illegal subsidies for electric cars. The tariff rate is currently ten percent.
Brussels’ actions “violate the principles of the market economy and international trade rules and undermine economic and trade cooperation between China and the EU as well as the stability of global automobile production and supply chains,” the Foreign Ministry spokesman continued. “We urge the EU to fulfil its commitment to support free trade and reject protectionism.”
Chancellor Olaf Scholz (SPD) has repeatedly spoken out against tariff increases. The German car industry, which is heavily involved in China, fears this will have a negative impact on it, as it would be affected by sales from China to Europe and because Beijing could respond with countermeasures.
“The tariffs on electric cars from China announced by the EU Commission will not be without consequences for the heavily export-oriented German economy,” warned Volker Treier, head of foreign trade at the German Chamber of Industry and Commerce (DIHK) on Wednesday. “Further trade conflicts must be avoided.” However, according to a study by the Cologne Institute for Economic Research (IW), the vast majority of industrial companies in Germany supported punitive tariffs against China because of increasing competitive pressure from the country.
