The European Union has announced that it will be imposing duties on imports of electric vehicles from China starting Thursday. This decision comes after unsuccessful negotiations between Brussels and Beijing to resolve their trade dispute. The European Commission spokesperson stated that the issue revolves around the impact of Chinese government subsidies on European markets and the surge in Beijing's exports of green technology to the EU.
According to the European Commission, the market share of Chinese-built electric cars in the EU has risen significantly, from 3.9% in 2020 to 25% by September 2023. This increase has been attributed to unfair pricing practices that undercut European industry prices.
The imposed duties will be in effect for five years, with ongoing negotiations between the EU and China to find a mutually agreeable solution. The EU emphasizes that any resolution must effectively address the identified problems and comply with World Trade Organization regulations.
Specifically, the duties on Chinese manufacturers will range from 17% for BYD, 18.8% for Geely, and 35.3% for vehicles exported by China's state-owned SAIC. Notably, Geely owns brands like Polestar and Volvo, while SAIC owns MG, a popular EV brand in Europe.
Other EV manufacturers in China, including Western companies like Volkswagen and BMW, will face duties of 20.7%. Tesla, on the other hand, will be subject to a 7.8% duty based on an individually calculated rate.
Despite the EU's decision, opposition has arisen in Germany, Europe's largest economy and home to major automakers. The head of Germany's auto industry association expressed concerns about the tariffs, labeling them as a setback for global trade and economic prosperity. The industry emphasizes the importance of resolving challenges through dialogue to avoid escalating trade conflicts.
