The European Union has decided to impose provisional duties on Chinese electric cars, varying depending on the manufacturer. Specifically for Byd of 17.4%, for Geely at 20%, for Saic 38.1%. Other producers who cooperated in the investigation will be subject to a duty d21%, while it will be 38.1% for those who did not collaborateor. The decision comes after an investigation that began last October provisionally concluded than Chinese manufacturers “they benefit from unfair subsidies” and that “they are causing a threat of economic damage to EU producers”. The justification reads that “the entire battery electric vehicle value chain benefits heavily from unfair subsidies in China and that the influx of subsidized Chinese imports at artificially low prices therefore represents a clearly foreseeable and imminent threat of injury to the EU industry”.
The Chinese reaction was immediate with the spokesperson of the Foreign Ministry Lin Jian which states that Beijing will take all measures to “firmly defend its legitimate rights and interests. We urge the EU to respect its commitment to support free trade, to oppose protectionism and work together with China to safeguard overall bilateral economic and trade cooperation,” Lin added.
Brussels’ decision follows a similar one adopted a few weeks ago by Washington but with different implications. While Chinese electric cars are almost absent from the US market, they have a stronger presence in Europe which is also strengthening. But, above all, the Chinese market, the largest in the worldis crucial for European brands like Mercedes or BMW and all the luxury segments that would suffer a heavy backlash in the event of presumable retaliation. Not by chance Germany has so far opposed the introduction of these measures. Furthermore, Chinese brands such as BYD have already installed production sites within the EU (Hungary) or are preparing to do so. A move which would probably exclude electric cars produced in the EU from any duties.
The decision on the tariff increase, if confirmed, It comes after months of investigations conducted by the Commission services to verify the existence of public subsidies intended for Chinese electric car manufacturers that distort competition. China, for its part, has repeatedly tried in recent days to dissuade the EU to take the measure even by threatening retaliation. Germany, which has important economic and commercial ties with Beijing, has always said it is against increasing duties (a customs tariff of 10% is already applied to imports of electric cars from China). Other EU countries, however, are primarily in favor of the imposition of higher duties France and Spain. The duties would be applied starting from next July and cars from non-Chinese manufacturers could also be of interest, like Tesla, but built in the Asian country.
