China responds to EU’s increased tariffs on electric vehicles
China has sharply criticized the European Union’s decision to raise tariffs on Chinese electric vehicles, describing it as “a blatant act of protectionism”.
The European Commission, which acts as the EU’s executive branch, announced that starting in early July, provisional tariffs of electric vehicles would be imposed on cars of China manufacturers. These additional tariffs could rise up to 38%, a significant jump from the current 10%, if ongoing discussions with China do not yield a satisfactory outcome. He Yadong, the spokesperson for the Chinese Ministry of Commerce, condemned the EU’s action on Thursday.
“This move will not only harm the legitimate rights and interests of China’s electric vehicle sector, and disrupt the mutually beneficial cooperation between China and Europe in the new energy vehicle industry, but it will also distort the global automotive industry and supply chains, including those of the EU,” he stated during a regular press briefing.
The EU Commission’s investigation, which began last year, concluded that the Chinese electric vehicle industry benefits from unfair subsidies that threaten economic harm to EU battery electric vehicle producers. The proposed tariffs would vary depending on the manufacturer. BYD would face an additional 17.4% charge, Geely, the owner of Sweden’s Volvo, would encounter a 20% surcharge, and SAIC would be hit with a 38.1% rate. He stated that China reserves the right to bring the issue before the World Trade Organization and will take “all necessary measures to protect the legitimate rights and interests of Chinese enterprises”.
In a related move, US President Joe Biden has recently imposed significant new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum, and medical equipment. Biden claimed that Chinese government subsidies allow the nation’s companies to operate without needing to turn a profit, giving them an unfair advantage in international trade. Experts have warned that these actions could lead to a trade war, which would increase prices for consumers and harm exporters and workers in both Europe and China, even though each serves as a major market for the other. “It’s a little bit like watching a slow-motion traffic accident,” said Jens Eskelund, the president of the European Chamber of Commerce in China, earlier this year. “The accident hasn’t happened yet, and … there is still a chance to find an off-ramp. But it is becoming urgent.”
In January, China issued a warning by launching an anti-dumping investigation into European brandy exports, including French cognac. France was a leading supporter of the EU investigation that led to the announcement of the new tariffs. The EU is also examining subsidies provided to Chinese wind and solar companies and investigating claims that China is unfairly restricting access to the market for medical devices, a long-standing complaint from European manufacturers.
