European Union decides to levy tariffs on electric vehicles manufactured in China
The European Union has decided to impose hefty customs duties on electric vehicles (EVs) made in China in its highest-profile trade case against China in more than a decade. The extra duties are intended to address the ’substantial unfair competitive advantage’ that Chinese automakers have due to state subsidy schemes.
The European Commission said on Friday that it received the “necessary support” to adopt its tariff proposals. This means it can now proceed with imposing definitive tariffs of up to 36.6 percent—on top of the current 10 percent—on EVs shipped from China.
The vote result is not publicly available. Under EU rules, the introduction of EV duties requires a qualified majority of 15 EU members, representing 65 percent of the EU population, to support its plan.
The decision brings the commission close to the end of a year-long investigation, which was formally announced by Ursula von der Leyen, head of the European Commission, in her State of the Union address in September 2023. She cautioned that the global market is “flooded with cheaper electric vehicles” and that the prices are kept “artificially low by huge state subsidies.”
“This is distorting our market,” she said at that time. “And as we do not accept this from the inside, we do not accept this from the outside.”
In its preliminary findings released in June, the commission revealed that the communist regime’s state subsidy network reached almost every part of the EV supply chain, from obtaining raw materials and manufacturing batteries to assembling cars and transporting them to ports.
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For automakers, benefits they received in China included securing land usage rights at prices below the market value from local authorities, accessing preferential lending interest rates from state-owned banks, securing a supply of lithium and batteries from state-backed companies, and benefiting from tax reductions or exemptions as part of state policies.
“The Commission concluded that there is a threat of material injury for the Union industry which is clearly foreseeable and imminent,” it stated.
China denied the EU’s accusations, and in a statement issued later on Friday, its Ministry of Commerce said it “firmly opposes” the decision to impose duties on Chinese EVs.
“[Raising tariffs] will only shake and hinder the confidence and determination of Chinese companies in investment and cooperation in Europe,” the ministry said. “China will take all measures to firmly protect the interests of Chinese enterprises.”
Luo Ya contributed to this report.
