EU Imposes Up to 38% Tariffs on Chinese EVs Over Excessive Subsidies

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2024-06-13

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Following the U.S. decision to impose a 100% tariff on Chinese electric vehicles (EVs), the European Union (EU) announced on the 12th that it will impose provisional anti-subsidy duties on Chinese imports of EVs starting July 4th, with rates up to 38%, in response to China's excessive subsidy policies. The Chinese Ministry of Commerce stated that it will take all necessary measures to defend the rights of Chinese enterprises.

The European Commission began an anti-subsidy investigation into Chinese EV imports last October. On the 12th, it announced the preliminary results, finding that Chinese government subsidies cover the entire EV industry chain. To protect local industry competitiveness, the EU will impose provisional anti-subsidy duties on BYD, Geely, and SAIC at rates of 17.4%, 20%, and 38.1%, respectively, starting July 4th. The anti-subsidy investigation will continue until November 2nd, and if confirmed, the high tariff rates will remain in effect for five years.

Regarding Western automakers like Tesla and BMW exporting cars from China to Europe, they are classified as cooperating companies in the investigation. The Chinese Ministry of Commerce expressed concern about the subsequent developments, accusing the EU's decision of lacking factual and legal basis and calling it a "protectionist act." The Ministry stated that it will take all necessary measures to defend the legitimate rights of Chinese enterprises. Germany, Sweden, and Hungary also worry that this move could provoke retaliation from China, but overturning the EU decision would require support from at least 11 other member states.