The European Union is poised to introduce tariffs on Chinese electric vehicles (EVs) as early as November, following a vote scheduled for late October, according to Valdis Dombrovskis, the European Commissioner for Trade.
“It is evident that member states recognize the necessity to safeguard the EU’s automotive industry due to the evident risk of injury,” Dombrovskis told the Financial Times. “The market share of Chinese battery electric vehicles is expanding rapidly, supported by subsidies. This issue requires immediate attention.”
In early July, the EU implemented provisional tariffs ranging from 17.4% to 37.6% on EVs manufactured in China, in addition to an existing 10% duty on Chinese auto imports. While this decision has angered Beijing, proponents argue it is crucial to protect EU manufacturers from unfair competition.
An investigation by the European Commission last year concluded that Chinese subsidies were enabling firms to maintain artificially low prices. China has denied these allegations, insisting its industry has grown naturally. As of June, Chinese brands held an 11% share of the European electric-car market, according to Dataforce.
EU member states will vote on permanent tariff proposals in late October, with implementation set for November. Dombrovskis expressed a willingness to find “a mutually acceptable solution” to the import dispute, which would require changes in China’s subsidy policies.
“The EU market remains more open to Chinese goods and companies than the Chinese market is to the EU,” Dombrovskis stated. “We focus on discussions with our Chinese counterparts to address market access barriers and ensure more reciprocal trade.”
However, some EU countries, particularly Germany, are concerned that opposing Chinese imports could harm European trade. China is a crucial market for German cars, leading some industrial stakeholders to hesitate in jeopardizing this relationship. Despite Germany’s outward criticism of the tariffs, it abstained from voting against the measures in an advisory poll in July.
“Germany has participated in discussions without making a commitment,” said German economy ministry spokesman Korbinian Wagner. “For the German government, it is now essential to seek a swift and amicable solution with China.”
Nine other EU members also abstained from voting, four states opposed the tariffs, and 11 voted in favor. To block the tariffs, votes from 15 countries representing 65% of the EU’s population are required.
Potential reaction by China
China’s potential reaction to definitive tariffs remains uncertain, though Beijing has threatened to impose its own levies on EU goods such as pork and spirits. Some Chinese carmakers have started opening plants in the EU to circumvent tariffs. Dombrovskis warned that a minimum portion of manufacturing must occur in the EU to avoid import fees.
The EU’s stance is more moderate compared to the US. In May, President Joe Biden imposed a 100% tariff on Chinese EV imports.
