Higher EU tariffs on Chinese electric cars take effect
Higher tariffs on Chinese electric vehicles in the EU came into force on Wednesday. The increased tariffs of up to 35.3 per cent will remain in place for five years. In the meantime, the EU will continue to negotiate with China on solutions that could replace the measure.
In July, the European Commission announced that it would impose temporary raised tariffs on imports of electric cars from China. According to the Commission, Chinese carmakers receive so many subsidies that they can flood the European market with cheaper cars, putting European competitors at a disadvantage. The tariffs range from 7.8 to 35.3 per cent and come on top of the existing 10 per cent import tax.
Despite months of negotiations with the Chinese government, no compromise has been reached. As a result, the temporary measure has been replaced by definitive tariffs for a period of five years. According to the EU, these tariffs are designed to offset the unfair advantage that Chinese companies receive from government subsidies.
While the new tariffs are now in place, China and the EU will continue to discuss possible compromises. One proposed solution is the introduction of minimum prices, whereby Chinese carmakers would agree to sell their vehicles at a base price to avoid the new tariffs.
'Protectionist' tariffs
China's commerce ministry calls the measure "protectionist" and "arbitrary". It said on Wednesday it "hopes the EU and China can quickly find a mutually acceptable solution" to "avoid an escalation of trade disputes". China has in the past threatened to raise tariffs on European exports such as dairy products, brandy and pork.
The move comes as European carmakers face an unprecedented crisis, with falling sales as a result of foreign competition. Audi announced this week that its Forest plant in Brussels will cease production in February while Volkswagen said on Monday it plans to close at least three plants in Germany, putting tens of thousands of jobs at risk.
Employees on an electric vehicle production line at a Leapmotor factory in Jinhua, China © PHOTO ADEK BERRY / AFP
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