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EU raises tariffs on Chinese electric vehicles, drawing rebuke from Beijing

The European Union has decided to drastically increase tariffs on Chinese-made electric cars, sparking an angry reaction from Beijing.

Tariffs of up to 45.3% will take effect on Wednesday after an investigation concluded that Beijing was undermining European automakers with unfair state subsidies.

China’s Ministry of Commerce said Wednesday it does not agree or accept the tariffs.

“We also noted that the EU has indicated that it will continue to negotiate with China on price undertakings,” the ministry said in a statement, adding that Beijing will take “all necessary measures to firmly protect the rights and legitimate interests of Chinese companies.”

Beijing, which accused Brussels of “unfair” and “unreasonable” protectionism during the investigation, has launched its own investigations into imports of European goods, including dairy and pork products.

The European Commission, responsible for the Union’s trade policy, announced the tariff increases on Tuesday after negotiations between Brussels and Beijing failed to reach a compromise in their long-running dispute over electric vehicle (EV) sales.

Under the new trade rules, the bloc will impose tariffs ranging from 7.8% for Tesla to 17% for Shenzhen-based BYD and 35.3% for Shanghai-based SAIC, as well as a standard 10% duty for imported vehicles.

The Commission argued that state subsidies allowed Chinese carmakers to impose unfair prices on their European rivals.

About 19.5% of electric vehicles sold in the bloc last year were produced in China, with the Transport and Environment policy group forecasting that Chinese automakers’ market share will exceed a quarter in 2024.

EU trade chief Valdis Dombrovskis said Tuesday that the tariffs were an example of the bloc “standing up for fair market practices and for Europe’s industrial base.”

“We welcome competition, including in the electric vehicle sector, but it must be underpinned by fairness and a level playing field,” Dombrovskis said.

The tariffs have however caused controversy within the EU itself, with Germany and Hungary expressing concerns that the measures could lead to a damaging trade war between the parties.

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