The EU to impose additional tariffs on Chinese-made EVs if negotiations fall through

The Chinese EV exports in Europe are another step closer to higher tariffs. After Turkiye announced its hefty 40% tariff on Chinese car imports a couple of days ago, the European Commission came out with a preliminary decision as well.

The European Commission started an investigation back in October last year to find out if Chinese EV makers are benefiting from unfair subsidies by the Chinese government. And as expected, the commission found that subsidies received by the Chinese BEV manufacturers are skewing the playing field and are slowly eroding the local BEV manufacturing.

That's why the commission will seek to negotiate with Chinese authorities to convince them to discontinue the practices it deems unfair. Should those negotiations fail it suggests imposing additional tariffs. The two parties will try to settle this in a WTO (World Trade Organization) compatible manner. The issue should be resolved by July 4 and if not, the following tariffs will be imposed.

BYD will get a 17.4% tax, Geely - 20% and SAIC - 38.1%. Other Chinese manufacturers will also be subjected to increased tariffs. Those who assisted the EU Commission's investigation but weren't sampled will be subject to a weighted average of 21% tax, while those who refused to cooperate will get the highest 38.1% tax.

There are exceptions, of course. For instance, Tesla will likely get individually calculated duty for vehicles produced in China and imported into the EU. Other manufacturers are free to file a request for a review and will get an individually calculated import duty within 9 months.

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