EU to slap extra tariffs of up to 38% on Chinese electric cars

Brussels provoked China’s ire by launching the probe last year in a bid to defend European manufacturers.

Hours before the announcement, Beijing warned that such a move would “harm Europe’s own interests”.

There is also dissent within the EU, with Germany, a major trade partner to China, saying the tariffs would harm German companies.

The European Commission has now ordered a provisional hike of tariffs on Chinese manufacturers: 17.4 percent for market major BYD, 20 percent for Geely and 38.1 percent for SAIC.

The commission said the amount depended on the level of state subsidies received by the companies.

All other electric car producers in China which had cooperated with the commission’s probe but were not sampled would face an average duty of 21 percent, it added.

The remaining BEV producers which did not cooperate with the investigation would be subject to a 38.1 percent duty.

This would be on top of the current rate of 10 percent on all electric cars produced in China.

To halt the extra tariffs being levied, Beijing and Brussels must resolve the subsidies issue.

“The Commission has provisionally concluded that the battery electric vehicles (BEV) value chain in China benefits from unfair subsidisation, which is causing a threat of economic injury to EU BEV producers,” it said in a statement.

“Should discussions with Chinese authorities not lead to an effective solution, these provisional countervailing duties would be introduced,” it added.

The tariffs will apply provisionally from July 4 and then definitively from November unless there is a qualified majority of EU states — 15 countries representing at least 65 percent of the bloc’s population — voting against the move.

China warned prior to the announcement that the tariffs would amount to “protectionism”.

“It goes against the principles of market economy and international trade rules, undermines China-EU economic and trade cooperation as well as the stability of the global automobile production and supply chain,” foreign ministry spokesman Lin Jian said.

“China will take all necessary measures to firmly safeguard its legitimate rights and interests,” he said.

Brussels launched the probe last year, with officials saying they wanted to put the brakes on what they claimed were unfair practices undercutting Europe’s car manufacturers.

The EU’s tariffs, while high, are lower than the United States’ 100-percent rate imposed from last month on Chinese electric cars.

Not all 27 EU member states welcome the commission’s move.

Germany, Hungary and Sweden already expressed reservations about the investigation and the push to slap higher duties.

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