Brussels is serious: The EU Commission is imposing punitive tariffs on Chinese electric cars. Beijing is protesting and threatening to take action in return.
Accompanied by fierce criticism from Germany, the EU Commission is imposing provisional punitive tariffs on imports of electric cars from China from Friday. “The countervailing tariffs will apply from July 5 for a maximum period of four months,” the EU authority announced in Brussels on Thursday. On June 12, the Commission announced the tariff surcharges on the previously applicable rate of ten percent and justified this with high subsidies from the Chinese government for electric car production across the entire value chain. This creates an unfair advantage over the European car industry and endangers its successful transition to electric cars.
Compared to the first announcement, the EU Commission reduced the highest surcharge slightly to 37.6 percent from the original 38.1 percent, responding to objections to its calculation. This tariff rate applies to car manufacturers that did not cooperate in the EU investigation that began nine months ago, such as Volkswagen partner SAIC. The lowest additional tariff for car manufacturers that cooperate with the EU was also reduced slightly to 20.8 percent. Geely, a shareholder and partner of Mercedes-Benz, has to pay 19.9 percent more import duty. This affects the Smart model, which Geely builds in China. The tariffs also affect all electric car imports from Tesla or European manufacturers, such as the electric Mini from BMW. The German car industry warned that the EU would worsen trade relations with the move and ultimately weaken its own car industry.
China condemns EU punitive tariffs on electric cars
The government in Beijing condemned the EU decision and threatened countermeasures. At the same time, talks were started at working level, which are still ongoing, with the aim of finding a solution within the framework of the World Trade Organization (WTO). “Any negotiation result of the investigation must effectively address the harmful forms of subsidies identified,” the EU Commission said. The EU wants to make a final decision on the tariffs by November, which the companies will not have to pay until then but will have to guarantee.
Source: Stern
