Starting July 4, tariffs of up to 38% on batteries for Chinese electric cars

The trade war intensifies and Beijing accuses of “protectionism” and claims that Europe’s interests will be harmed. The Chinese media have been threatening for days with retaliation against imports of agri-food products from the EU. Discontent in Germany, Hungary and Sweden. An annual loss of $4 billion is estimated for Chinese industries.

Brussels (/Agencies) – Starting July 4, the European Union will increase tariffs on imports of batteries for electric cars if an agreement is not reached with the Chinese authorities. The European Commission adopted this measure on the issue of “public subsidies” to producers, which have long been in the spotlight of Brussels, which considers them a form of unfair competition against their companies. The measure announced today, as planned, one day after the elections for the renewal of the European Parliament, was immediately accused of “protectionism” by the People’s Republic of China, according to which “this will harm the interests of Europe.”

The European Commission has ordered a provisional increase in tariffs on Chinese manufacturers: 17.4% for the main BYD, 20% for Geely and 38.1% for SAIC. The difference is related to the level of government subsidies that companies receive. Other Chinese electric car makers that cooperated with the Commission’s investigation but were not included in the sample will have to pay an average tariff of 21%, while those that did not cooperate will be subject to a tariff of 38.1%. . These measures are in addition to the current 10% tariff that applies to all electric cars produced in China.

The entry into force has been set provisionally as of July 4 and will be final as of November if the issue is not resolved. However, the measure could still be blocked if a qualified majority of European Union states (15 countries representing at least 65% of the bloc’s population) ruled against it. One of the European countries opposed is Germany, which has strong interests in the Chinese car market, along with Hungary (where a large BYD production plant will soon be built) and Sweden (as Volvo is controlled by Geely).

In recent weeks, Chinese media had intensified Beijing’s threats to attack EU exports, including pork and dairy products, if Brussels introduced such tariffs. And today the spokesperson for the Ministry of Foreign Affairs of Beijing, Lin Jian, in response to a question on the subject, pointed out the internal divisions in Europe in this regard: “We have observed that senior officials and business leaders from several European countries have declared recently against the European Commission’s investigation and have claimed that imposing more tariffs on Chinese electric vehicles to protect the European industry would be the wrong approach, he said. We urge the EU to fulfill its commitment to support free trade and oppose protectionism, and to work with us to support comprehensive economic and trade cooperation between the two sides. “China will take all necessary measures to firmly defend our legitimate rights and interests.”

China is the world’s largest automobile exporter and Europe is a crucial market for its interests. According to the Peterson Institute for International Economics, based in the United States, imports of electric vehicles from China will increase from about 57,000 in 2020 to about 437,000 in 2023. Before the EU measure, Germany’s Kiel Institute for World Economy had estimated in a report that the impact of a 20% tariff would mean 125,000 fewer Chinese electric cars per year, with economic damage to the Chinese industry of almost $4 billion.