EU gives green light to taxes on Chinese electric cars

After this decision, the German Finance Minister urged the European Commission to avoid triggering a “trade war” with Beijing.

The European Commission now has a free hand to add to the 10% tax already in place on electric cars manufactured in China, a surcharge of up to 35%. Member countries of the European Union gave the green light on Friday, October 4, to the imposition of these customs duties aimed at restoring fair conditions of competition against Chinese manufacturers accused of benefiting from massive public subsidies. These countervailing duties are due to come into force at the end of October.

According to diplomats interviewed by AFP, France and Italy voted in favor, 12 abstained and five countries voted against. Among them: Germany, which had led the charge against this option, with German car manufacturers fearing retaliation from China, their first market where they generate around a third of their sales.

The German Finance Minister, the liberal Christian Linder, urged the European Commission to avoid triggering a “trade war” with Beijing and called for “a negotiated solution” between the bloc of 27 and the Asian giant. For the leading European automobile group, the German Volkswagen, this green light constitutes “the wrong approach” to improve the “competitiveness of the European automobile industry“. In a press release, its competitor, BMW, denounced “a fatal signal for the European automobile industry”.

In France, this decision worries the cognac industry, which fears paying the price of a possible trade war between Brussels and Beijing. “The French authorities have abandoned us. We do not understand why our sector is being sacrificed in this way”declared the National Interprofessional Cognac Bureau (BNIC) in a press release sent to AFP, while China threatened to tax wine-based spirits imported from the EU.

With imports taxed at 10%, Europe was “a bit of a village idiot”since it is one of those which taxes this industry the least, argued on the contrary the Transport expert Renaud Kayanakis, from the SIA Partners firm, guest of franceinfo at the end of August. “In Europe, imports are taxed at 10%, while in the United States it is 100%, in India it is between 70% and 100%, and in Turkey it is 40%”detailed the expert, “so we return to a common situation which is observed in other markets”, he pleaded.