The European Union has imposed provisional tariffs of up to 38% on Chinese electric vehicles, set to take effect on July 5, 2024. This decision follows a four-month investigation by the European Commission, which found that Chinese manufacturers benefit from unfair government subsidies, potentially causing ‘significant harm’ to the EU’s automotive industry.The tariffs vary by manufacturer, with BYD facing 17.4%, Geely 19.9%, and SAIC 37.6%. Other manufacturers that cooperated with the investigation will be subject to a 20.8% tariff, while those that did not cooperate will face the maximum 37.6% rate. These provisional measures will be in place for a maximum of four months, during which time the EU will continue negotiations with China to find a mutually acceptable solution.The EU Commission expects these tariffs to reduce demand for Chinese electric cars in the EU by 42%. However, the impact on overall electric vehicle prices in Europe is expected to be minimal in the long run. The move mirrors similar actions taken by the United States, which increased tariffs on Chinese electric vehicles from 25% to 100% in mid-May.This decision has sparked concerns about potential retaliation from China, with threats of imposing tariffs on European luxury cars and other goods such as cheese, wine, and ham. The German government and major automakers, including Volkswagen, BMW, and Mercedes-Benz, have expressed opposition to the tariffs, fearing negative impacts on their operations in China, the world’s largest car market.While some EU countries like France, Italy, and Spain support the measure, others including Germany, Poland, Greece, and the Czech Republic have expressed doubts. The EU maintains that it will continue to engage in talks with China to find a solution compatible with World Trade Organization rules, emphasizing the need for fair competition and protection of the European electric vehicle industry.
Key points
- EU imposes provisional tariffs of up to 38% on Chinese electric vehicles, effective July 5, 2024.
- Tariffs vary by manufacturer: BYD (17.
- EU Commission expects a 42% reduction in demand for Chinese electric cars in the EU.
- Concerns rise over potential Chinese retaliation and impact on European, particularly German, automakers.
4%), Geely (19.
9%), SAIC (37.
6%), with others facing 20.
8% or 37.
6%.
Contradictions👾While most sources report the maximum tariff as 37.
6%, some mention it as 38%.
👾There are differing views among EU countries, with some supporting the measure and others expressing doubts.
