Brussels: The European Commission has officially approved steep tariffs on electric vehicles (EVs) manufactured in China, marking the end of a one-year investigation, as reported by Euro News.
Euro News states that the additional taxes on electric cars from China are moving forward as scheduled, despite negotiations with China continuing and will take effect on Wednesday.
These tariffs are expected to last for the next five years.
At the same time, Brussels will continue discussions with China to secure an agreement on minimum prices that could replace the tariffs. Euro News noted that this approach, supported by Germany, is complex and challenging to implement.
Despite the tariff implementation, Brussels maintains its commitment to resolving the issue with China through the enforcement of customs duties and rules that align with the World Trade Organization (WTO), though this goal remains unachieved.
"By implementing these targeted and proportionate measures following a thorough investigation, we are defending fair market practices and the European industrial base," Valdis Dombrovskis, the Commission's executive vice president overseeing trade, stated.
Euro News indicates that the tariffs' activation was anticipated following a recent inconclusive vote where member states failed to achieve the required majority in support or opposition to the measures.
To overcome this deadlock, the Commission used its trade authority to approve the duties, which are in addition to the current 10% rate and vary by brand.
For example, Tesla will face a tariff of 7.8%, BYD will be subject to 17%, Geely will have to pay 18.8%, SAIC will face a 35.3% tariff, and other EV manufacturers in China who participated in the investigation but were not individually targeted will have a tariff of 20.7%, while those who did not cooperate will face a 35.3% tariff.
Euro News reports that the executive argues the need for these additional tariffs to counteract the subsidies Beijing is providing to its domestic EV industry on a large scale.
The financial assistance given to Chinese manufacturers has led to them offering their goods at prices lower than those of their European rivals, as confirmed by the Commission.
As a result, it was noted that Chinese companies' electric vehicle (EV) sales in Europe have surged rapidly, with their market share increasing from 1.9 percent in 2020 to 14.1 percent by the second quarter of 2024, as predicted by the Commission.
It was also noted that without strict actions, European car manufacturers could face significant and irreversible financial losses, potentially being driven out of the profitable market for zero-emission vehicles, which could result in the shutdown of facilities and the layoff of thousands of employees, as reported by Euro News.
"There's a clear and immediate danger to our automotive sector if it fails to shift to electric vehicles and consequently faces extinction," a senior EU official stated on Tuesday, speaking on the condition of anonymity.
Euro News reported that China has rejected the Commission's investigation from the start, labeling it as a "purely protectionist move" that denies the presence of subsidies, calling the conclusions "manipulated and overblown," and threatening to take counteractions against the EU's dairy, spirits, and pork sectors, causing concern among some governments.
"We had a fundamental disagreement on every point we made in the investigation," the senior EU official stated. "It was a significant disagreement."
Lately, as the US and Canada have imposed 100 percent tariffs on Chinese EVs, Europe still remains a lucrative market for Beijing's premium products.
