Beijing is not happy about the European Union’s decision to slap tariffs, as high as 48%, on Chinese electric cars – calling it a “naked protectionist act” that’s about to shake up the global automobile industry.
The EU’s ruling comes after an eight-month investigation revealing China giving unfair subsidies to its electric vehicle industry. This move follows similar tactics by the U.S. who have raised tariffs on Chinese goods earlier this year.
China’s Ministry of Commerce hit back, stating the EU’s ruling lacks legal and factual basis, accusing the EU of waving the green flag for sustainability on one hand and brandishing the stick of protectionism on the other.
Brussels and Beijing have until July to come to an agreement and avoid the new tariffs. The Commission is set to increase tariffs for major Chinese automakers, with additional duties for non-cooperative manufacturers.
Valdis Dombrovskis from the EU Commission made it clear that rules will be enforced if broken, while Chinese officials stress the need for innovative cooperation instead of walls.
In the past, CVDs have typically been low or high double-digits. This case has a high maximum on EV duties. Here we have shown the CVD maximum for historical cases. EV duty is above average. pic.com/MZWPO8ns6l
Chinese EV exports have been on the rise, set to increase from just 4.2% in 2018 to 35% by 2023. Gregor Sebastian of the Rhodium Group considers the new tariffs notably high, altering the negotiation dynamics between the EU and China.
China has hinted at escalating trade tensions in response to EU actions, potentially impacting European businesses. On the flip side, China has initiated anti-dumping inquiries on products from various countries, including the EU and the U.S.