EU Imposes Tariffs on Chinese Electric Vehicles in Landmark Trade Case

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EU Imposes Tariffs on Chinese Electric Vehicles in Landmark Trade Case

EU Imposes Tariffs on Chinese Electric Vehicles

The European Commission has received enough support from EU members to impose tariffs of up to 45% on Chinese electric vehicle imports. This marks the bloc's highest-profile trade case against China.

The Commission, which oversees the EU's trade policy, proposed final duties on Chinese-built EVs for the next five years. This move aims to counter what it sees as unfair Chinese subsidies, following a year-long anti-subsidy investigation.

In a vote on Friday, 10 EU members backed tariffs, while five voted against, and 12 abstained. It would have taken opposition from a qualified majority of 15 EU members, representing 65% of the EU population, to block the proposal.

The EU executive confirmed it had obtained the necessary support to adopt the tariffs, but would continue talks with Beijing to find an alternative solution.

Germany, the region's biggest economy and major car producer, voted against the proposal. Industry leaders expressed concerns about the potential impact of the tariffs.

China's foreign ministry did not immediately respond to a request for comment.

The EU's stance towards China has hardened in recent years. It views China as a potential partner in some issues, but also as a competitor and a systemic rival.

In moves seen as retaliation, Beijing this year launched its own probes into imports of EU brandy, dairy, and pork products.

The Commission says China's spare production capacity of three million EVs per year, which needs to be exported, is twice the size of the EU market. Given 100% tariffs in the United States and Canada, the most obvious outlet for those EVs is Europe.

The EU executive has said it is willing to continue negotiating an alternative to tariffs with China and could re-examine a price undertaking. The tariffs range from 7.8% for Tesla to 35.3% for SAIC and other companies deemed not to have cooperated with the EU investigation. These tariffs are on top of the EU's standard 10% import duty for cars.