The European Union has announced that it will be imposing extra tariffs of up to 38% on electric vehicles imported from China. This decision is aimed at protecting the region’s manufacturers from what they perceive to be unfair competition. This move comes in the wake of President Biden’s decision to quadruple U.S. tariffs on Chinese electric vehicles to 100%.
The escalating trade tensions between the EU and China have raised concerns about a potential oversupply of Chinese electric vehicles in global markets. The EU’s decision to increase tariffs reflects the challenges faced by traditional automakers in Europe and the United States from Chinese companies that focus on electric vehicles and operate at much lower cost bases.
Unlike U.S. automakers, many European car manufacturers have significant investments in the Chinese market. As a result, their vehicles produced in China will also be subject to the higher tariffs. This has led to criticism from European automakers, who fear retaliation from China, as well as potential price increases and a decrease in demand for electric cars.
The new tariffs, which will come into effect on July 4th, will range from 17.4% to 38.1% for leading Chinese manufacturers such as BYD, Geely, and SAIC. These rates were determined based on the level of cooperation these companies had with European officials during an investigation into the level of support they receive from the Chinese government.
Other automakers producing electric vehicles in China, including European companies with factories or joint ventures in the country, will face tariffs of either 21% or 38.1%, depending on their level of cooperation with the investigation.
Overall, the decision to impose extra tariffs on Chinese electric vehicles by both the EU and the U.S. underscores the growing tensions in the global trade landscape. It also highlights the competitive pressures faced by traditional automakers in the West from Chinese companies that are rapidly expanding their presence in the electric vehicle market.