Commission Secures Backing to Levy Tariffs Ranging Between 40-45% on Imports of Chinese Electric Vehicles

The European Union (EU) has proposed tariffs of up to 45% on Chinese electric vehicle imports, marking a significant move in the ongoing trade tensions between the two global powers.

The EU executive's decision comes after a year-long anti-subsidy investigation, which found that China was providing unfair subsidies to its domestic electric vehicle industry. The tariffs are aimed at countering these subsidies and leveling the playing field for European manufacturers.

In a vote on Friday, ten EU members backed the tariffs, five voted against, and 12 abstained. The measure is expected to pass, with France, Italy, and Poland planning to vote in favour. However, it would have taken opposition from a qualified majority of 15 members, representing 65% of the EU population, to block the proposal.

Not all European companies are in favour of the proposed tariffs. Stellantis, the fourth-largest automaker in the world, has expressed concern about the Chinese global commercial offensive and ambitious carbon reduction plans. While it supported free and fair competition, it did not specify which other companies within Stellantis voiced their support. Volkswagen, another major European automaker, also stated that the planned tariffs were "the wrong approach."

Germany, the region's biggest economy and major car producer, voted against the proposal. Oliver Zipse, the CEO of BMW, described the vote as "a fatal signal for the European automotive industry."

The stance of the EU towards Beijing has hardened in the last five years. The EU views China as a potential partner in some issues, but also as a competitor and a systemic rival. Hungarian Prime Minister Viktor Orban stated that the EU was headed for an "economic cold war" with China.

Despite the proposed tariffs, the EU is continuing talks with Beijing to find an alternative solution. No immediate response was given by China's foreign ministry regarding the tariffs. The details about the specific carbon reduction plans that are causing pressure in the sector are not yet clear.

As the trade tensions escalate, it remains to be seen how the situation will unfold and what impact it will have on the global automotive industry. The tariffs, if implemented, will be in effect for the next five years.

Commission Secures Backing to Levy Tariffs Ranging Between 40-45% on Imports of Chinese Electric Vehicles