EU threatens to increase taxes on Chinese electric vehicles from July

Brussels will have four months, after the imposition of provisional duties, to impose definitive duties.

The European Commission threatened, Wednesday June 12, to impose additional customs duties on imports of electric vehicles from China, from July 4. “As part of its ongoing investigation, the Commission has provisionally concluded that China’s battery electric vehicle value chain benefits from unfair subsidies, posing a threat of economic harm to EU producers”explained the European executive.

Vehicles manufactured in Chinese factories were until now taxed at 10% in the EU. Brussels plans to add countervailing duties of 17.4% for the Chinese manufacturer BYD, 20% for Geely and 38.1% for SAIC, after nearly nine months of investigation. For other manufacturers, an average duty of 21% should apply. The amount will differ depending on the levels of public subsidies received.

These provisional rates were communicated to the various companies concerned and to the Chinese authorities for “study ways to resolve the problems identified”explained the Commission. “If discussions with the Chinese authorities do not result in an effective solution, these provisional countervailing duties would be introduced from 4 July”but they “would only be collected if definitive duties were imposed“, she clarified.

Brussels will have four months, after the imposition of provisional duties, to impose definitive duties. But member countries will be able to reject them if at least 15 of them, representing at least 65% of the EU population, oppose them. Germany, whose manufacturers are very involved in China, fought with Sweden and Hungary to avoid sanctions against Chinese manufacturers, fearing reprisals. France and Spain, on the contrary, pushed for targeted and proportionate measures.

A spokesperson for the Chinese Ministry of Foreign Affairs warned Wednesday morning, even before Brussels’ announcement, that a tax on vehicles manufactured in China would be “harmful” to European interests, denouncing a protectionist attitude. “Our goal is not to close the EU market to Chinese electric vehicles, but to ensure that competition is fair”commented the European Commissioner for Trade, Valdis Dombrovskis, on the social network X.