EU Slaps Up To 45% Tariff On Chinese-Made EVs As "Economic Cold War" Risks Soar
Bloomberg reports that EU member states have voted to slap tariffs of up to 45% on Chinese-made electric vehicles, ignoring warnings from some members that this dangerous move risks sparking an "economic cold war" with Beijing.
The European Commission, the bloc's executive arm, recently concluded its anti-subsidy investigation into Chinese imports of battery electric vehicles. The findings supported the Commission's move to implement the duties, which would last for five years.
Sources familiar with the voting told Bloomberg that ten member states voted in favor of the duties, while Germany and four others voted against - and 12, including Spain, abstained.
The new duty rate will be as high as 35% for foreign EV manufacturers exporting from China. There is already an existing 10% duty, which means the rate for some foreign EVs imported into the bloc could be as high as 45%. We have provided additional color on the rates here.
The Commission released this statement:
Today, the European Commission's proposal to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China has obtained the necessary support from EU Member States for the adoption of tariffs. This represents another step towards the conclusion of the Commission's anti-subsidy investigation.
In parallel, the EU and China continue to work hard to explore an alternative solution that would have to be fully WTO-compatible, adequate in addressing the injurious subsidization established by the Commission's investigation, monitorable and enforceable.
A Commission Implementing Regulation including the definitive findings in the investigation must be published in the Official Journal by 30 October 2024, at the latest.
As we've previously noted, the duties are part of an anti-subsidy investigation launched earlier this year by the Commission. About 100 firms were investigated. The big finding included market-distorting subsidies across China's entire EV supply chain.
Meanwhile, the bloc has been actively pushing far-left climate change policies to de-growth its economy. The entire bloc is a mess with recession threats emanating from Germany as its automotive manufacturing industry stalls.
Former European Central Bank President Mario Draghi warned last month that "China's state-sponsored competition" threatened member states. Last year, the EU traded 739 billion euros ($815 billion) with China.
Earlier, Hungarian Prime Minister Viktor Orban said the EU tariffs on China could spark an "economic cold war"...
European carmakers, including Mercedes-Benz, Stellantis, BMW, and Volkswagen, all have a massive footprint in China that could be jeopardized if Beijing retaliates.
But hold up, wait a second. Haven't far-left Western leaders, including many in the US, called Trump's tariff plans against China 'terrible'? Hypocrisy at its finest.