The European Union raised taxes on Chinese electric vehicles on Wednesday, deepening a trade battle over Beijing’s export subsidies, which Brussels believes are hurting domestic automakers.
The European Commission, the EU’s executive arm, announced that it will impose provisional tariffs, potentially increasing Chinese automakers’ charges by up to 38% from the existing level of 10%.
The commission stated that it contacted Chinese officials to discuss the findings of its subsidy inquiry and “explore possible ways to resolve the issues.”
Electric vehicles are the newest flashpoint in a bigger trade battle over what Brussels claims is China’s improper state subsidy for green technology exports such as solar panels, batteries, and wind turbines.
Imports of Chinese-made EVs to the European Union have increased dramatically in recent years. They include vehicles from Western manufacturers with auto facilities in China, such as Tesla and BMW.
However, EU officials argue that Chinese automakers such as BYD and SAIC are expanding market share and undercutting European car brands in price due to Beijing’s hefty subsidies.
The commission stated that an investigation it launched last year into China’s EV subsidies discovered that China’s battery electric vehicle value chain “benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.”
The additional tariffs would vary by firm. BYD would incur an extra 17.4% fee. Geely, the owner of Sweden’s Volvo, would face an additional 20%. For SAIC, that would be an additional 38.1%.
Speaking at a daily briefing, Chinese Foreign Ministry spokesperson Lin Jian slammed the EU’s inquiry as “typical protectionism” and stated that Beijing will “take all measures necessary to protect our legitimate rights and interests.”
