Unfair government subsidies, EU announces duties against Chinese electric cars

Brussels – The Chinese government has helped domestic electric car manufacturers with “unfair” government subsidies to the detriment of the market, competition, and European manufacturers. The European Commission is no longer in doubt and is going on the offensive, announcing plans to impose duties on imports of ‘made in China’ products. It is not yet an open trade war: Beijing has until July 4 for an amicable solution. If there is no progress, the EU will impose duties provisionally. At that point, there would be four months to seek conciliation, after which the duties would remain permanently.

In the crosshairs are the big battery car manufacturers, namely BYD, Geely, and SAIC, for which the Commission envisages duties of 17.4 percent, 20 percent, and 38.1 percent, respectively. For other manufacturers of electric cars in China who cooperated in the investigation, a weighted average duty of 21 percent is ready, and there would be a 38.1 percent residual duty for all other companies active in China that did not cooperate with the Commission.

The European Commission launched the investigation on October 4, announcing it in her State of the Union address. The EU executive took its time and kept its commitments to counter China’s policy, which is seen as detrimental not just for a specific industrial sector but an attempt to hinder the European Green Deal and broader green economy policy.

The EU does not want confrontation with the People’s Republic of China. “Our goal is not to close the European market to Chinese electric vehicles, but to ensure that competition is fair,” stresses Trade Commissioner Valdis Dombrovskis, who hopes for a solution that can avoid a tariff war with the Asian country.