The European Commission has confirmed it will start imposing steep taxes on Chinese electric vehicles imported into the EU, as Brussels has reason to believe that the Chinese government has heavily subsidised the production of vehicles, creating unfair competition for European manufacturers.
From Friday 5 July, duties of up to 37.6% will be applied to battery electric vehicles (BEVs) imported from China. The duty on BEVs is provisional until Member States vote in the coming months on whether to make it permanent and mandatory.
Thursday's announcement comes nine months after the Commission launched an anti-subsidy investigation into BEVs from China, amidst growing concerns that the Chinese State is pumping subsidies into its BEV industry to artificially lower the price of vehicles and undercut EU manufacturers.
That investigation found that there was "unfair subsidisation" of BEV production in China, which is "causing a threat of economic injury to EU BEV producers".
Under EU and WTO (World Trade Organisation) rules, all parties involved in the investigation are entitled to present their comments, evidence and arguments, including the Chinese government and BEV companies and exporters.
The Audi Q8 e-tron is produced in Brussels. EU production has been undercut by considerably cheaper Chinese vehicles. Credit: Belga / Dirk Waem
The Chinese government has said the proposed tariff on Chinese BEVs is protectionist and undermines trade cooperation between the EU and China.
In a statement announcing the provisional tariffs on Thursday, the Commission said that consultations with the Chinese government have "intensified in recent weeks", and talks are continuing to negotiate an agreed outcome to the investigation which will address concerns raised by the EU.
Tariffs from July
In the immediate term, from tomorrow (5 July) individual duties applied to named Chinese BEV producers are: BYD (17.4%), Geely (19.9%), SAIC (37.6%).
For other BEV producers in China, those who co-operated with the EU investigation will be subject to a 20.8% weighted average duty, while those who did not co-operate face a tariff of 37.6%. The rates are slightly lower than those pre-disclosed on 12 June, as the Commission said it adjusted rates downwards after interested parties raised concerns about the accuracy of calculations.
The provisional duties will apply for a maximum of four months, giving Member States time to vote on definitive duties which then would be adopted for a five-year period. Member States have two weeks to vote on the provisional measures while interested parties can also request hearings with the Commission and submit their own views on the provisional measures.
After this, the Commission will present its proposal for definitive measures, and again interested parties will have an opportunity to comment on the proposal.
Member States will then take a final vote on the Commission's proposal for more permanent tariffs, and the binding decision will see measures come into force for at least five years.
