EU Imposes Tariffs on Chinese EVs, Drawing Criticism from Beijing
The EU will impose additional tariffs on Chinese EVs that range from 17.4% to 38.1%. This action comes after the United States declared plans to quadruple levies on Chinese electric vehicles to 100%. The levies are intended to prevent excessive subsidies and protect European automakers.
This move comes just weeks after the United States announced plans to quadruple levies on Chinese EVs to 100%. The EU's decision is intended to counteract excessive subsidies while maintaining the interests of European automakers. However, it faces retaliation from Beijing, which has promised to take action to protect its own interests.
The new tariffs imposed by the EU might cost Chinese automakers billions of euros. This comes at a critical moment for the industry, which is already dealing with diminishing demand and falling prices. European automakers, on the other hand, are experiencing greater competition from cheaper EVs manufactured by Chinese competitors. The Commission forecasts that Chinese EVs already account for 8% of the EU market, up from less than 1% in 2019, with the amount expected to climb to 15% by 2025. Chinese EVs are often priced 20% lower than European-made competitors.
The EU's decision represents a fundamental shift in its trade policy, particularly given it has never before taken such action against such a vital industry. European authorities are determined to avoid a repeat of the decade-long collapse of European solar panel producers, which was blamed on a lack of action against Chinese imports.
The introduction of the tariffs had an immediate impact on European automakers, with shares of key companies that rely significantly on Chinese sales declining. Companies like as BMW, which manufacture EVs in China for the European market, may now face increased taxes on their products.
China has condemned the EU's move, describing it as a "typical case of protectionism" that will harm economic cooperation between China and the EU, as well as the stability of global vehicle production and supply networks. Beijing has pledged to take all necessary steps to safeguard its lawful rights and interests.
Despite the levies, Chinese EV manufacturers and suppliers are already investing in European production sites to avoid the increased costs. This decision could help them avoid tariffs and continue to grow in the European market.
It remains to be seen whether China will retaliate against the EU decision. Beijing has passed legislation to bolster its power to respond to tariffs imposed by the United States or the EU. The EU's temporary duties will take effect on July 4, with the probe continuing until November 2. Definitive duties, usually lasting five years, could be levied at this point.
Western automakers such as Tesla and BMW, which export automobiles from China to Europe, have been considered to be collaborating with the inquiry as a result of the EU decision. However, Tesla has proposed that a separate company-specific pricing be established.
While some experts believe the tariffs will have little immediate economic impact, with Chinese EV imports accounting for only around 4% of family vehicle spending, others forecast a 25% drop in Chinese EV imports as a result of the levies. This reduction could be countered by increasing manufacturing in Europe, but European automakers may not be able to fill the entire gap.
The EU's decision has elicited mixed reactions, with Italy hailing it and the French car lobby group urging the Commission to protect European interests from anti-competitive conduct. French car lobby group calling for the Commission to defend European interests against anti-competitive practices.
The EU will impose additional tariffs on Chinese EVs, ranging from 17.4% to 38.1%.
This move comes after the US announced plans to quadruple duties on Chinese EVs to 100%.
The tariffs aim to combat excessive subsidies and protect European automakers.
Source: REUTERS