New EU tariffs of 35% on all imported electric vehicles made in China come into force in November. This is a definitive decision of the EU that was made after the vote of 27 member states.

Two years ago, the European Commission launched an investigation into the privileged position of electric vehicles produced in China due to subsidies. “These can also be vehicles from other manufacturers if they have used subsidies in China,” said Executive Vice President of the European Commission for an Economy Valdis Dombrovskis. In order to protect European car manufacturers, it was decided that EVs from China will be subject to an additional customs duty of 38.1%. However, the EU gave the companies a chance to cooperate in the investigation, so it was decided that those who accept cooperation will have temporary lower tariffs (20.8% instead of 21%), while those who refuse cooperation will have tariffs of 37.6 percent.

In the meantime, the European Commission completed an investigation that concluded that Chinese manufacturers receive large subsidies from the Chinese government, which destroys European manufacturers. Chinese authorities rejected the results of the investigation and threatened to impose tariffs on cars and food from the European Union.

Also, the European Union specified that any alternative to these tariffs, such as the minimum price, must comply with strict requirements, which are aligned with the rules imposed by the World Trade Organization (WTO).

It should be noted that some European manufacturers, such as BMW, Mercedes-Benz and Volkswagen, were against additional tariffs on EVs from China. Some members even asked for tariffs of 45%. However, the European Commission has announced that it will start a new round of negotiations with China in order to solve the problem for a long time.

Source: Reuters