A model poses with Chinese electric-vehicle giant BYD’s latest model, a four door hatchback called the “Dolphin”, at the Tokyo Auto Salon in January. The European Union moved closer Friday to imposing duties on imports of Chinese-made EVs that would see BYD’s cars hits with tarrifs of 17% while those of firms deemed not cooperating could face duties as high as 36.3%. File photo by Keizo Mori/UPI |
License PhotoOct. 4 (UPI) — European Union member countries agreed Friday to proceed with the imposition of tarrifs on Chinese electric vehicles exactly one year after launching a probe into whether Beijing was subsidizing its domestic producers and the impact on EV-makers in the EU.
The European Commission said in a news release that sufficient countries that make up the bloc had backed its proposal to adopt “countervailing duties on imports of battery electric vehicles from China,” saying it brought the conclusion of its anti-subsidy investigation a step closer — but held out the possibility of a way out of a potential trade war.
“In parallel, the EU and China continue to work hard to explore an alternative solution that would have to be fully World Trade Organization-compatible, adequate in addressing the injurious subsidization established by the commission’s investigation, monitorable and enforceable,” said the European Commission.
However, time to reach a compromise was running short with the deadline for the issuing by the commission of a so-called Implementing Regulation making the tariffs law in all 27 member states expiring Oct. 30.
In August, the commission watered down the duties it originally proposed after receiving feedback from interested parties including EU electric car manufacturers — fearful China would erect trade barriers to their vehicle exports — with tariffs of 17% and 19.3% for BYD and Geely, 21.3% for “other operating companies,” rising to a 36.3% top rate for “non-cooperating companies” such as SAIC.
Chinese business organizations attacked the anti-subsidy action calling it politically motivated and protectionist and warning that slapping high tariffs on EVs would not only damage Chinese enterprises but would also disrupt the operations of European and global automakers that manufacture EVs in China.
“China’s competitive advantage in EVs is not due to subsidies but rather to a robust supply chain, developed through intense competition,” the Chinese Chamber of Commerce to the EU wrote in a post on X.
Noting that only 10 member states voted in support of the tariffs, with the remaining 17 voting against or abstaining, the group called on the EC to delay enforcing them as long as negotiating teams from the EU remained “actively engaged in discussions, striving to find viable solutions.”
There was plenty of criticism closer to home too, particularly from premium automakers including Germany’s Volkswagon which called the duties a wrong-headed move that would not achieve the goal of boosting the European industry’s competitiveness.
It called on the parties to keep negotiating in the time still remaining before the tariffs enter force this month to try to head off a “trade war.”
The German government also expressed dissatisfaction Friday with German Finance Minister Christian Lindner, calling the tariffs “punitive” and urging Brussels to avoid igniting a trade war.
“Despite the vote for possible punitive tariffs against China, [EC President] Ursula von der Leyen’s EU Commission should not trigger a trade war. We need a negotiated solution,” he said in a social media post.
However, Chinese-owned Volvo in Sweden, part of Hangzhou-based Geely Holdings, took a different view saying in a statement that it planned to stick with its business model of building its vehicles in the markets in which they were sold having made “significant long-term investment into Europe.”
Stellantis, a French-Italian joint operation, said “policies supporting the demand and ensuring stability of the rules” had never been important amid intense Chinese competition and pressure to cut C02 emissions.
