December 25, 2024

Employees work on the electric vehicle (EV) production line at the Zero Sports Car Factory in Jinhua, east China’s Zhejiang Province, on September 18, 2024.

Berry Boy | AFP | Getty Images

The European Union voted on Friday to impose final tariffs on Chinese-made battery electric vehicles (BEVs).

“Today, the European Commission’s proposal to impose clear countervailing duties on battery electric vehicles (BEVs) imported from China has received the necessary support from EU member states to adopt tariffs,” the EU said in a statement.

It added that the decision marks a step forward in the conclusion of the European Commission’s anti-subsidy investigation into China’s electric vehicles launched in October 2023.

The EU first announced in June that it would impose higher tariffs on Chinese electric vehicle imports on the grounds that the vehicles “benefited significantly from unfair subsidies” and posed a “threat of economic harm” to European electric vehicle manufacturers.

As part of the EU’s investigation into Chinese electric car production, tariffs on individual companies were also revealed, related to the extent of their cooperation and the information they provide to the EU.

The temporary tariffs were implemented from early July.

The European Commission subsequently revised the tariff plan in September based on “substantive comments on the interim measures” from relevant parties.

A spokesman for China’s Ministry of Commerce told reporters that Beijing still believed that the investigation into subsidies for China’s electric vehicle industry had reached “preset conclusions”, adding that the EU was promoting unfair competition.

On Friday, the EU said it was still looking for other solutions even if the tariffs were adopted.

“At the same time, the EU and China continue to work hard to explore alternative solutions that are fully WTO compliant, adequate to address the harmful subsidies identified by the Commission’s investigation, monitorable and enforceable,” the report states.

Industry reaction

German carmakers criticized the EU’s decision.

Mercedes-Benz called the tariffs a “mistake” and urged the European Commission to delay implementation, while BMW said the move marked a “fatal sign” for the European auto industry, Reuters reported. According to a Reuters report, Volkswagen, which is in crisis, also called on the EU and China to continue discussing the issue and said it was still possible to find alternative solutions.

Swedish carmaker Volvo Cars, owned by China’s Geely Holding, said it would “continue to pursue our long-standing strategy of building cars where we sell them and committing to significant long-term investment in Europe,” according to a statement.

Meanwhile, French-Italian conglomerate Stellantis said the industry was facing pressure from plans to reduce carbon dioxide emissions and competition from China, noting that “policies that support demand and ensure the stability of rules are more important than ever”.

European auto stocks were up 1.19% as of 11:25 a.m. London time.

divisions within the EU

The decision comes after months of debate and deliberation among EU member states, which expressed differing views on raising tariffs on imported Chinese-made electric vehicles.

While France has been a strong supporter of the EU and has previously pushed for the bloc to open an investigation into potential tariffs, Germany has argued against it, raising concerns about its consequences. Automakers in trouble themselves.

German Finance Minister Christian Lindner on Friday urged the European Commission not to start a trade war.

“Despite voting in favor of potentially punitive tariffs on China, the European Commission led by Ursula von der Leyen should not trigger a trade war. We need to find a negotiated solution,” he said in a statement. postal on social media platform X, according to a CNBC translation.

According to Reuters, Hungarian Foreign Minister Peter Szijjarto said on Thursday that Hungary would veto the European Commission’s proposal for tariffs of up to 45%.

Potential retaliation from China has been a major concern for some EU member states, especially as China has launched anti-dumping investigations into EU exports of pork and brandy, and launched countervailing investigations into EU dairy products.

—CNBC’s Sam Meredith and Ryan Browne contributed to this article.

Here's why Europe's tariffs on Chinese EVs may not work

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