Source: AFP
The European Commission said on Tuesday it plans to impose five-year import tariffs of up to 36% on Chinese electric cars unless Beijing can offer an alternative to a damaging trade dispute over state subsidies.
It also said that Tesla cars made in China would face a lower tariff of 9%.
Brussels last month hit Chinese EVs with steep temporary tariffs — on top of the current 10 percent duties — after an anti-subsidy investigation found they unfairly undermined European competitors.
On Tuesday, the Commission published a draft plan to make those tariffs final, subject to submission by stakeholders by the end of August and approval by EU member states by the end of October at the latest.
The final rates facing major Chinese manufacturers will be 17 percent for major BYD purchases, down from 17.4, 19.3 percent for Geely, from 19.9 and 36.3 percent for SAIC, from 37.6.
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Other producers in China that cooperated with Brussels would face a 21.3 percent tariff — revised up slightly from 20.8 — while those that did not would be subject to a maximum tariff of 36.3 percent.
US billionaire Elon Musk’s Tesla – which manufactures in China – had asked Brussels for its own tariff rate, set at nine percent, after the Commission ruled it benefited from fewer Chinese subsidies than domestic manufacturers.
Beijing strongly opposes the EU tariffs and has filed an appeal with the World Trade Organization — which Brussels noted while expressing confidence that its measures are WTO-compliant.
“The EU is open to reaching a solution that would be an alternative to imposing tariffs that would be effective and compatible with the WTO,” a Commission official told reporters.
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“We think it is very much up to China to find alternatives,” they said.
On the temporary duties the companies have faced since July 5, which are provided in the form of bank guarantees, the commission said it decided it had no legal grounds to collect the funds, which will be released once the definitive measures come into force. .
Balancing act
China and the EU have been at odds in recent years on a range of issues related to trade, technology and national security.
The EU has launched a series of probes targeting Chinese subsidies for solar panels, wind turbines and trains, while Beijing has launched its own probes into imported European brandy and pork.
But Brussels faces a delicate balancing act as it tries to defend Europe’s critical auto industry and shift to green growth while avoiding a showdown with Beijing.
China’s emergence as an EV powerhouse comes in part from a targeted industrial strategy, with Beijing pouring massive state capital into domestic companies as well as research and development.
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The approach has given Chinese companies a critical advantage in the race to deliver cheaper, more efficient electric vehicles against leading European automakers, which have not always enjoyed such state grandstanding.
According to the Atlantic Council, Chinese electric vehicle sales abroad will increase by 70% in 2023, reaching $34.1 billion.
Almost 40% went to the European Union, the largest recipient of Chinese electric vehicles.
Source: AFP
