EU moves ahead with provisional tariffs on China EV imports

Volvo Car parent Geely and BYD will be hit with added charges of 19.9% and 17.4% respectively.

The EU moved ahead with plans to impose provisional tariffs on electric vehicles imported from China that would raise rates to as high as 48%, a step likely to escalate trade tensions with Beijing.

The EU confirmed it would apply provisional duties on three Chinese manufacturers that were sampled for its anti-subsidy investigation. State-owned MG maker SAIC Motor faces a 37.6% tariff on top of the existing 10% rate, while Volvo Car parent Geely and BYD will be hit with added charges of 19.9% and 17.4% respectively.

Other EV producers in China that co-operated with the investigation but have not been sampled will be subject to a weighted average duty of 20.8%, while firms that did not cooperate will face a 37.6% top-up.

Western carmakers such as Renault, BMW, and Tesla are also affected, with the US manufacturer currently making up the bulk of EU-bound EV shipments from China.

The provisional duties will apply on Friday, July 5, and definitive duties would kick in by November barring an alternative solution, or if a qualified majority of EU member states block the final move. 

The EU, which said talks with China have intensified in recent weeks, concluded in its probe that China subsidises its EV industry to a degree that causes economic harm to the eurozone’s carmakers.

“Those talks with China are ongoing,” Valdis Dombrovskis, an executive vice-president of the European Commission, said.

“Should a mutually beneficial solution emerge, we can also find ways then not to apply at the end of the day the definitive tariffs — but it’s very clear that this solution needs to resolve this market distortion we’re currently having,” he added.

The EU move follows a US decision to impose a 100% duty on EVs from China, though shipments are currently close to zero. Canada last month said it was weighing tariffs as well. 

While China has threatened to retaliate, the EU’s comparatively well-off consumers represent an important outlet for domestic EV makers battling overcapacity.

China has already launched a targeted anti-dumping probe on pork imports. The findings of an investigation into EU spirits are due early next year but could come any time, based on what’s happened before. 

Beijing has warned it could hit European agricultural goods, aviation and cars with large engines. China could also decide to challenge the EU’s probe at the World Trade Organization.