EU countries are expected to confirm steep tariffs on electric cars made in China on Friday, a move that is dividing the bloc as some states led by Germany fear it could spark a trade war with Beijing.
The European Commission provisionally approved additional tariffs in June after an investigation concluded that Beijing’s state aid to carmakers was unfair.
China has accused the new tariffs of up to 35.3 percent — on top of the existing 10 percent — as “protectionist” and warned they would spark a trade war.
Brussels says it aims to protect European carmakers in a crucial industry that provides jobs to around 14 million people across the European Union but does not benefit from heavy state subsidies like in China.
Canada and the United States have in recent months imposed much higher tariffs of 100% on imports of Chinese electric cars.
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The EU tariffs will become permanent for five years from October 31 if approved by representatives of the bloc’s 27 member states in a vote expected on Friday morning.
Despite opposition from Germany, along with Spain, Slovakia and Hungary, EU diplomats told AFP there were not enough countries to oppose the tariffs.
EU rules state that to stop the Commission’s additional tariffs, at least 15 states, representing 65 percent of the bloc’s population, must vote against it.
France, Italy and Poland as well as the Baltic states are expected to support the tariffs.
If there is no suspension majority, the Commission will be free to finalize the tariffs, which also apply to vehicles made in China by foreign groups such as Tesla, which face a rate of 7.8%.
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The tariffs have pitted France and Germany against each other, with Paris arguing they are necessary to equalize EU carmakers against their Chinese counterparts.
But Germany, known for its strong auto industry and key manufacturers such as BMW, Volkswagen and Mercedes that have invested heavily in China, says the EU risks hurting itself with tariffs and has request that negotiations with Beijing continue.
In a sign of fears spreading across Europe, Spanish Prime Minister Pedro Sanchez reversed course and asked Brussels last month to “reconsider”, despite initial support from Madrid.
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Hungary has also voiced its opposition, with Foreign Minister Peter Szijjarto saying this week that Budapest would vote against a “dangerous” proposal.
Beijing has threatened to respond strongly to the tariffs and has opened investigations into European brandy, dairy and pork products imported into China.
China has tried in vain to halt the tariffs, hoping to resolve the issue through dialogue, but the talks have so far failed to produce a deal that satisfies the EU.
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The commission said any tariffs could be lifted later if China addresses EU concerns.
Trade tensions between China and the EU are not limited to electric cars, as investigations launched by Brussels also target Chinese subsidies for solar panels and wind turbines.
The bloc faces a difficult task as it tries to boost its clean-tech industry and invest in the green transition without igniting a painful trade war with China.
Since July, the maximum additional duty on EVs has been revised downward — to 35.3 percent from up to 38 percent — following EU discussions with stakeholders.
Source: AFP