The EU imposes additional tariffs of up to 35.3% on Chinese electric vehicles

BRUSSELS: The EU decided on Tuesday (Oct 28) to impose heavy tariffs on Chinese-made electric cars after an anti-subsidy probe found Beijing’s support was undermining European carmakers.

The additional taxes have been controversial, with strong opposition from Germany and Hungary, for fear of provoking China’s ire and sparking a bitter trade war.

Beijing has previously rejected the European Union’s “unfair” and “unreasonable protectionist practices” during the investigation.

“By taking these proportionate and targeted measures after a rigorous investigation, we are standing up for fair market practices and for the European industrial base,” EU trade chief Valdis Dombrovskis said in a statement.

“We welcome competition, including in the electric vehicle sector, but this must be underpinned by fairness and a level playing field,” he said.

But the German auto industry’s main association warned the tariffs raised the risk of a “far-reaching trade conflict”, while a Chinese trade group rejected the “politically motivated” decision even as it urged dialogue between the two sides.

The duties are in addition to the current 10 percent on imports of electric vehicles from China.

The decision became law after being published in the EU’s official gazette later on Tuesday and the duties come into effect from Wednesday.

The Brussels investigation showed that Chinese state subsidies unfairly undermined European car manufacturers.

Once the rates come into effect, they are final and valid for five years.

The additional duties also apply, at different rates, to vehicles made in China by foreign groups such as Tesla – which carries a rate of 7.8 percent. Chinese auto giant Geely – one of the country’s largest sellers of electric vehicles – will face an additional 18.8 percent duty, while SAIC will be hit the highest at 35.3 percent.