The European Commission has announced its intention to introduce new duties on Chinese electric cars. Their value could thus increase further, considering that a 10% duty was already present, at which there could be a variation from the value by 17 or 38.1% depending on the company. In this way the Chinese electric cars they could cost up to 48.1% more. This is a measure to address the problem of Chinese competition, considered unfair because they sell the cars at much lower prices thanks to government subsidies.
EU towards decision on new duties on Chinese electric cars: the proposal
The European Union recently announced the introduction of duties provisional on imports of electric cars coming from China, with variable rates depending on the manufacturer. This measure was taken in response to an investigation that began last October which found that Chinese manufacturers benefit from subsidies by the government. The sale of cheap cars would cause economic damage to European manufacturers.
In detail, the new tariff regime provides for a duty:
- by 17.4% per Byd
- by 20% per Geely
- by 38.1% per Saic
To these is added the 10% already existing for all imported electric cars (such as those imported by Stellantis). Other producers who cooperated in the investigation will be subject to a 21% duty, while those who did not cooperate will see the maximum rate of 38.1% applied.
Valdis DombrovskisVice President of the European Commission, stressed that the EU investigation is “anchored in facts and evidence” and aims to counter the distorting effect of subsidies unjust about our industry.
China’s response: new measures to defend itself
The announcement of new duties it provoked immediate and strong reactions from both China and various European countries. The spokesperson of the Chinese Foreign Ministry, Lin Jiansaid Beijing will take all necessary measures to “firmly defend its legitimate rights and interests” and urged the EU to oppose protectionism and collaborate with China to safeguard bilateral economic and trade cooperation.
Also there Germany has expressed concerns, with Transport Minister Volker Wissing having criticized the duties, stating that they have an impact on German companies and their flagship products. Berlin fears that Chinese retaliatory measures could hit Germany’s strong auto industry hard economic ties with China.
Other EU countries such as France and Spain supported the introduction of the new tariffs, seeing them as a defense against unfair competition of Chinese electric cars, which benefit from massive subsidies that allow them to sell to very low prices.
Risk of increases for the European market: consequences on the ecological transition of cars
The imposition of duties up to 38.1% on Chinese electric cars will inevitably have repercussions on prices of these vehicles in the European market. The EU’s goal is to force Chinese companies to increase prices of their cars, reducing the gap with those produced in the West and re-establishing conditions of competition fairer.
Some analysts believe that these tariffs may not be enough to offset the huge amount of subsidies Chinese companies benefit from; these could still maintain significant profit margins despite the new duties. Furthermore, there is a real risk that China could adopt retaliatory measuressuch as limiting the export of key components such as batteries, creating problems for global production chains and, in particular, European ones.
As the EU seeks to protect its automotive industry from competition deemed unfair, the introduction of these duties It raises complex and potentially risky issues for international trade relations and for the electric car market (Italy has yet to comment on the decision), which is at the center of rapid technological and industrial evolution globally.
