EU tariffs on China’s EVs

The European Commission is this week expected to present the tariffs it plans to impose on Chinese electric vehicles (EVs) due to what it says are excessive subsidies.

Analysts expect tariffs of between 10% and 25%. The move is likely to prompt stern words and possible retaliation from Beijing.

Less than a month after Washington quadrupled duties for Chinese EVs to 100%, Brussels will set almost certainly far lower tariffs for imports from Chinese makers such as BYD and Geely as well as western producers such as Tesla that export cars from China to Europe.

The move comes as European automakers are being challenged by an influx of lower-cost EVs from Chinese rivals.

German automakers in particular are heavily dependent on sales in China – and thus fear retribution from Beijing – and European auto firms also import their own Chinese-made vehicles.

But European Commission President Ursula von der Leyen has repeatedly said Europe needs to act to prevent China from flooding the bloc’s market with subsidised EVs.

China has rebuked the EU over the anti-subsidy investigation, urged cooperation and lobbied individual EU countries, but didn’t clearly say what its response to tariffs would be.

Beijing has already launched an anti-dumping investigation into mostly French-made imports of brandy. It also passed a law in April to strengthen its ability to hit back should the United States or EU impose tariffs on Chinese exports.

The EU’s pre-disclosure notice comes a few weeks before the July 4 deadline for imposing provisional measures. They could though apply retroactively for the prior 90 days.

Interested parties will be given three working days to comment on the accuracy of the Commission’s calculations.

The investigation will continue until late October, when a decision on whether to impose definitive duties, typically for five years, will be taken. Proposed duties would apply unless EU governments overwhelmingly oppose them.

That leaves time for a potential deal to be struck between Brussels and Beijing.