EU States Approve Tariffs on Chinese Electric Vehicles Amidst Ongoing Negotiations

The European Union has taken a significant step towards imposing tariffs on Chinese battery electric vehicle (BEV) imports, a decision that will have far-reaching implications for the global auto industry. On October 30, EU member states approved tariffs on Chinese BEV imports for the next five years. This move follows the European Commission's slight adjustments to the duty rates after receiving input from various stakeholders.

Tariffs Take Effect October 31

If no agreements are reached between the European Commission and individual companies, these definitive duties will be implemented starting on October 31. The proposed tariffs, which have been met with mixed reactions, required support from a qualified majority of 15 EU countries representing 65% of the population to pass. Despite opposition from Germany, which has raised concerns about the potential impact on the auto industry, the proposal was ultimately approved.

German MEP Michael Bloss criticized his country’s stance, stating, "This capitulation to China is not only weak; it harms Europe." Bloss, a spokesperson for the Greens on climate and industry policy, argues that stronger measures are necessary to protect European industry from unfair competition.

The European Commission continues to emphasize that any agreement reached with China must comply with World Trade Organization (WTO) rules and be effective in addressing harmful subsidies. Negotiations between the EU and Chinese officials are ongoing, with China's commerce ministry confirming that discussions will resume on October 7.

The new countervailing duties, which add to the existing 10% import duty on BEVs, include a 17% tariff on BYD, a slight decrease from the earlier proposed rate. Geely’s rate was lowered to 18.8%, while Tesla, exporting from China, will face a 7.8% duty. Other companies that cooperated with the EU inquiry face a 20.7% tariff, and non-cooperating firms will be subject to a 35.3% duty.