EU to hit Chinese EVs with extra tariffs of up to 38%

Beijing calls move protectionist; Chinese industry group says no major impact

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The European Commission told automakers on June 12 that it would impose extra duties of up to 38.1 per cent on imported Chinese electric cars from July, in a move that China called protectionist but its car industry dismissed as one without a major impact.

Less than a month after Washington quadrupled duties for Chinese electric vehicles (EVs) to 100 per cent, Brussels said it would set additional tariffs of 17.4 per cent for BYD, 20 per cent for Geely and 38.1 per cent for SAIC, on top of the existing 10 per cent, over what it said were excessive subsidies.

That equates to billions of euros of extra costs for the carmakers at a time when they are struggling with slowing demand and falling prices at home, according to Reuters calculations based on European Union trade data in 2023.

The move comes as European automakers are being challenged by an influx of lower-cost EVs from Chinese rivals. Shares in some of Europe’s biggest carmakers, which make a big portion of their sales in China, fell on fears of Chinese retaliation. Some like BMW will also now incur duties on their EVs made in China and sold in Europe.

The European Union Chamber of Commerce in China said on June 12 it believes that if tariffs are to be levied, it should be done proportionately and in a manner that is both transparent and consistent with World Trade Organisation rules.