In a move to address concerns over Chinese government subsidies and the surge in Chinese electric vehicle (EV) exports to the European Union (EU), the EU has finalized increased customs duties on EVs imported from China. The decision follows an eight-month investigation by the European Commission, which found that Chinese EV manufacturers benefit from substantial government support, allowing them to undercut EU competitors on pricing and gain a significant market share.
The duties, which vary by manufacturer, range from 17% to 35.3%, with companies like BYD, Geely, and SAIC facing higher rates. The EU aims to protect its industrial base and fair market practices by implementing these targeted measures.
The rapid growth of Chinese EVs in the EU market, from 3.9% to 25%, has raised concerns about the potential threat to European jobs and the region's ability to produce green technology independently. The EU fears a repeat of the scenario seen with subsidized Chinese solar panels that led to the demise of European producers.
China has criticized the EU's move as protectionist and unfair, prompting retaliatory actions such as anti-dumping investigations into European exports and potential tariff increases on gasoline-powered vehicles. Talks between the EU and China have focused on finding a resolution, with some Chinese automakers considering local production in Europe to avoid tariffs.
While the US has raised tariffs on Chinese EVs to 100%, the EU aims to strike a balance by ensuring affordable EVs without unfair subsidies. The EU tariffs are designed to counter the perceived excess subsidies benefiting Chinese carmakers.
It remains uncertain how the duties will impact car prices, as Chinese manufacturers may absorb the costs to maintain competitiveness. However, the EU warns that allowing unfair practices could lead to reduced competition and higher prices in the long run.
Overall, the EU's decision reflects its commitment to safeguarding fair competition and protecting its automotive industry from perceived distortions in the global market.
