EU, duties on Chinese electric cars final

Brussels – EU-China, the European Commission breaks the deadlock and imposes duties on Chinese manufacturers’ electric cars sold in the single market. The EU executive published the implementing regulation that will trigger trade tariffs to be applied to the selling price of “made in China” sold in Europe. Thus, overcharges will be triggered for battery-powered four-wheelers from Saic (35.3 per cent), Geely (18.8 per cent), Byd (17 per cent) and even Tesla (7.8 per cent). Imposts that are in addition to those already in place and amount to 10 per cent of the commercial value of the various clean cars and can be levied retroactively up to three months after the imposition of the provisional duties, decreed last July 4.

The European Commission’s decision comes after the attempts gone awry of an amicable and agreed solution with its Chinese counterpart, with whom there is now a real risk of a full-blown open trade war. The government of the People’s Republic has already responded to the European moves with restrictions on alcohol imported from the EU. Before that, it had announced the start of an investigation into alleged anti-competitive measures for twelve-star dairy products sold in the country, an inquiry considered in Brussels as outright trade retaliation.

The goal of the EU executive is to avoid escalation. While duties are being imposed on electric cars from and by China, which will remain in force for five years with the possibility of an eventual extension, negotiations are continuing to arrive at an end to the tariff war and freeze them as soon as possible. Commission technicians are also prepared to make a trip to Beijing when and if conditions make it possible and necessary, although no trip or meeting is currently scheduled.

Still, a sense of frustration reigns in Brussels over a decision one would have wanted to avoid. “We engaged in good faith and continuously” with Chinese colleagues, admits the Commission. However, as EU audits have confirmed “clear evidence of rule violations”, in light of unsuccessful negotiations, the von der Leyen team sticks to their guns.

“By taking these proportionate and targeted measures after a rigorous investigation, we are defending fair market practices and the European industrial base,” stresses Trade Commissioner Valdis Dombrovskis. “At the same time, we remain open to a possible alternative solution that would effectively address the problems identified and compatible with the World Trade Organization (WTO).”