EU clampdown on imports of Chinese electric cars with duties increased to almost 50% to balance a production system which according to Brussels is artificially supported by public subsidies from China. “Our goal is not to close the European market to Chinese electric vehicles, but to ensure that competition is fair,” said European Commission Vice President for Trade Valdis Dombrovskis. In response, Beijing accused Europe of protectionism, stating that the EU “ignored the facts and the rules of the WTO”, intervening against an advantage obtained by China in electric vehicles with “open competition”.
However, the protests were not long in coming even within the Union. Starting from Berlin, for weeks there has been pressure on the community executive to avoid the crackdown and above all to limit it as much as possible: “We don’t need other obstacles in trade”, said the chancellor’s spokesperson Olaf Scholz, inviting the Commission to offer talks to China. Hungary also spoke of an “excessive protectionism of the plan”, while Sweden is also believed to be clearly against it. For Italy, the Minister of Business and Made in Italy Adolfo Urso instead greeted “with satisfaction” the announcement “to protect European production” aiming to “reaffirm the Italian automotive industry in Italy, one of the driving sectors of development industrial sector of our country which we absolutely do not want to give up.
Stellantis, “as a global company”, instead said it believes “in free and fair competition in a global trading environment and does not support measures that contribute to the fragmentation of the world”.
In concrete terms, the new European additional duties will reach up to 38.1%. From the current 10% they will therefore bring customs duties on Chinese electric vehicles up to 48.1%, or almost half the ‘duty free’ price. Brussels has indicated different duties for individual producers: they range from 17.4 for Byd, to 20% for Geely and 38.1% for Saic. The additional duties will then be 21% for the companies that collaborated in the investigation, including large European companies that produce locally. While 38.1% more will be paid for those who did not collaborate. Tesla, Elon Musk’s electric giant, has asked for ad hoc and lower tariffs for its production in Shanghai.
According to the European Commission, there are no critical issues that could make the outcome of the investigation launched in the autumn questionable, which it considers documented and WTO-proof. “We had no choice but to act in the face of a surge in imports of heavily subsidized battery electric vehicles” from China, Dombrovskis warned.
“These distortions negatively impact the level playing field in the single market and global markets and harm EU businesses.” A dialogue will now start with Beijing and the new tariffs should formally come into force at the beginning of July although the investigation will continue until the beginning of November, when the duties will become definitive.
All eyes are now on the possible reactions from Beijing, which recently announced an investigation into dumping of European brandy, especially French. However, France itself is among the countries pushing hardest for the increase in duties on Chinese electric vehicles. Today, Beijing applies customs tariffs of 15% on European vehicles. A month ago the US announced an increase in duties on Chinese electric vehicles from 25 to 100%. The EU Commission estimates that in three years the market share of Chinese electric vehicles has gone from 3.9 to 25% in the EU and sees a risk from unfair Chinese competition which could cost 2.5 million jobs in Europe, with an additional 10.3 million jobs.
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