EU hits electric vehicles from China with higher tariffs

The European Union said on Wednesday that Chinese manufacturers will face tariffs of up to 38% on electric vehicles imported into the bloc, in what EU leaders said was an effort to protect the region's manufacturers from unfair competition.

The blockade will impose provisional duties ranging from 17.4% to 38.1% for three major Chinese manufacturers, including BYD, Geely and SAIC. Other Chinese automakers face tariffs of 21% or 38.1%, depending on their cooperation with the European Union in its investigations into the matter.

The move to raise tariffs has been criticized by several European automakers who fear it could raise prices, scare customers and lead to costly retaliation from China.

The European Union defended the action, saying in a statement that an investigation had found that China's electric vehicle supply chain “benefits heavily from unfair subsidies in China, and that the influx of subsidized Chinese imports at artificially low therefore represents a clearly foreseeable and imminent threat of injury to the EU industry.”

The European Commission, the executive branch of the European Union, opened an investigation last fall to determine whether the Chinese government was actually subsidizing its production of electric cars and sending them to Europe at prices lower than European competitors.

The automotive sector provides nearly 13 million jobs across the 27-nation bloc, the world's second-largest market for electric vehicles after China. Electric car imports from China last year reached $11.5 billion, up from $1.6 billion in 2020, and generated a trade surplus of more than 100 billion euros, or $107 billion.

Around 37% of all electric vehicles imported into Europe come from China, including cars made by Tesla, BMW and Renault-owned Dacia. Chinese brands account for 19% of the European electric vehicle market. Their number is constantly growing, according to a study by the Rhodium Group.

However, the commission focused on three of China's major electric car makers – BYD, Geely and SAIC – all of which agreed to cooperate with the investigation.

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