EU targets Chinese EV imports with 45% tariff hike

Lailuma Sadid
Credit: AP Photo/Ng Han Guan, File)

Brussels (Brussels Morning Newspaper) – The EU has decided to raise tariffs on Chinese EVs to as much as 45.3 per cent prompting retaliation from Beijing.

The European Union is setting duties on imports of electric vehicles from China beginning from 30 Oct 2024 after discussions between Brussels and Beijing failed to find an agreeable solution to their trade conflict. Electric vehicles have become a central flashpoint in a broader trade dispute over the influence of Chinese government subsidies on European markets and Beijing’s burgeoning exports of green technology to the EU.

Why is the EU imposing tariffs on Chinese EVs?

“By adopting these proportionate and targeted measures after a rigorous examination, we’re standing up for fair market practices and the European industrial base,” European Commission Executive Vice President Valdis Dombrovskis expressed. “In parallel, we remain open to a likely alternative solution that would be useful in addressing the problems identified and (World Trade Organization)-compatible,” he said. 

According to the EU Commission, which handles trade disputes on behalf of the 27 E.U. member countries, deals of Chinese-built electric cars leapt from 3.9% of the EV market in 2020 to 25% by September 2023, in part by unfairly undercutting E.U. industry costs. The duties on Chinese manufactories will be 17% on cars made by BYD, 18.8% on those from Geely and 35.3% for vehicles shipped by China’s state-owned SAIC. Geely has brands including Polestar and Sweden’s Volvo, while SAIC holds Britain’s MG, one of Europe’s bestselling EV brands.

how are Chinese subsidies influencing the EU’s EV industry?

The EU Commission expresses China extended its E.U. market share with the usefulness of subsidies across the production chain. These varied from cheap land for factories supplied by local governments, to cut-price supplies of lithium and batteries from state-owned enterprises, to tax breaks and comfortable financing from state-controlled banks.

The rapid increase in China’s market share has increased concern in the E.U. that Chinese cars will eventually endanger the E.U.’s ability to produce its green technology to fight climate change. Business groups and unions also worry that the jobs of 2.5 million auto industry employees could be put in danger, as well as those of 10.3 million more people whose work depends indirectly on EV production.

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Brussels Morning is a daily online newspaper based in Belgium. BM publishes unique and independent coverage on international and European affairs. With a Europe-wide perspective, BM covers policies and politics of the EU, significant Member State developments, and looks at the international agenda with a European perspective.
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Lailuma Sadid is a former diplomat in the Islamic Republic of Afghanistan Embassy to the kingdom of Belgium, in charge of NATO. She attended the NATO Training courses and speakers for the events at NATO H-Q in Brussels, and also in Nederland, Germany, Estonia, and Azerbaijan. Sadid has is a former Political Reporter for Pajhwok News Agency, covering the London, Conference in 2006 and Lisbon summit in 2010.
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