- The European Commission has gained support from EU member states to impose tariffs of up to 45% on electric vehicle imports from China, raising fears of a potential trade war.
- German and Spanish officials oppose the tariffs, warning of possible retaliatory actions from China that could negatively impact EU exports like cars and agricultural products.
The European Commission has secured sufficient backing from EU member states to implement significant tariffs of up to 45% on imports of electric vehicles (EVs) from China. This development raises concerns about an escalating trade conflict between the EU and China. The Commission announced on Friday that China’s proposal to impose definitive duties on battery electric vehicles (BEVs) has garnered the necessary support for adoption.
While the tariffs aim to address alleged unfair subsidisation practices from China, the Commission emphasised that the EU and China are actively seeking alternative solutions that would comply with World Trade Organization (WTO) rules. These solutions must effectively address the subsidies identified in the Commission’s investigations and be both monitorable and enforceable.
Despite the Commission’s progress, some EU member states expressed reservations during the vote, with Germany and Spain notably opposing the tariffs. Both countries are concerned about the potential for a full-blown trade war, fearing retaliatory measures from China that could target EU exports, including cars, pork, dairy products, and brandy.
Provisional tariffs, which have been in place since July 5, are set to last for a maximum of four months. These tariffs have prompted a strong reaction from China, which has initiated anti-dumping investigations into EU imports, mainly focusing on brandy and pork, likely affecting Spain, France, the Netherlands, and Denmark.
German automakers have strongly opposed EV tariffs, arguing that the duties would impact Chinese manufacturers, European companies, and their joint ventures. The VDA, Germany’s automotive association, highlighted the potential negative consequences for the broader European automotive industry.
Following the vote, Oliver Zipse, CEO of BMW, expressed his concern, stating that the outcome is a “fatal signal” for the industry. He urged for a swift resolution between the EU Commission and China to avert a trade conflict that could prove detrimental to all parties involved.
As the situation develops, the EU faces the challenge of balancing its trade policies with the economic interests of member states, particularly those with significant ties to China. The coming weeks will be critical as the EU seeks to navigate these complex trade dynamics while maintaining its competitive edge in the global market.