China Considers Increased Tariffs on Large Engine Vehicle Imports

Policy Aimed at Supporting Green Transition Amid Rising Trade Tensions

The Chinese government is contemplating a proposal to raise import tariffs on large displacement fuel vehicles. Commerce Ministry spokesperson He Yadong stated that such a move aligns with World Trade Organization rules and supports the green transformation of the automotive sector. The proposal was discussed in a meeting with industry experts and scholars on August 23.

This potential tariff hike comes in response to the European Union's proposed countervailing duties on imports of battery electric vehicles (BEVs) from China, announced on August 20. The EU's proposed duties include 17% for BYD, 19.3% for Geely, 36.3% for SAIC, and varying rates for other companies, including a 9% duty on US-based Tesla. The specific tariffs and implementation dates for China's potential increase remain undisclosed.

China's automobile imports fell by 2% year-over-year to 400,000 units from January to July, reflecting a rise in domestic vehicle market share and the country’s rapid vehicle electrification. European exports of large fuel vehicles to China dropped by 20% to 88,000 units during the same period. Additionally, trade tensions have escalated, with Canada announcing a 100% tariff on Chinese EVs effective October 15.

China’s new energy vehicle (NEV) exports grew by 26% to 1.14 million units from January to July, including a significant increase in exports to Canada.