EU proposes lower tariffs on Chinese-made electric vehicles after input from car makers
Chinese firms SAIC and Geely will have their rates lowered from 36.3 per cent to 35.3 per cent and from 19.3 per cent to 18.8 per cent, respectively.
These duties will be applied in addition to the base rate 10 per cent tariff the EU applies to all EV imports. The news was first reported by MLex, a regulatory news service.
Chinese government officials have been scrambling to strike a deal with the European Commission to end the dispute before the EU’s 27 member states hold a vote later this month that could see the duties written into law for a five-year period.
During the vote, 15 of 27 member states accounting for 65 per cent of the bloc’s population would have to go against the tariffs to stop them.
“The electric vehicle anti-subsidy case is complex and has a wide impact. It is challenging for China and the EU to reach an agreement through consultations,” the Chinese commerce ministry said on Tuesday.
02:03
Chinese-made electric vehicles face additional EU import tariffs of up to 38%
It urged the EU to “show sincerity” and said the two sides could resolve each other’s concerns, adding: “China is willing to continue to work closely with the EU to reach a solution that is in the common interests of both sides and in line with WTO rules as soon as possible.”
Although Brussels is willing to talk, there is scepticism as to whether it is possible to cut a grand bargain: any Chinese proposal would have to mirror the effect of the anti-subsidy duties, which would be applied by October 31 at the latest.
The EU says Chinese subsidies are allowing companies to export their cars to Europe at a discount, making locally made models less affordable. Beijing has denied that this is the case, and said that the sector’s success is a result of planning and innovation.
Even the EU’s top tariff – the 35.3 per cent plus 10 per cent base rate for SAIC – is low compared with some other major Western markets, including the United States and Canada, which have moved to impose 100 per cent import duties.
In a report published on Monday, the former Italian prime minister Mario Draghi said that higher tariffs elsewhere will continue to make the EU an accessible market for subsidised Chinese products.
“In response to perceived unfair competition, an increasing number of countries are raising tariff and non-tariff barriers against China, which will redirect Chinese overcapacity towards the EU market,” the former European Central Bank chief added.
He said that keeping the EU market open to Chinese-made EVs would “be unlikely to succeed” since it could jeopardise jobs.
“According to ECB simulations, if the Chinese EV industry were to follow a similar trajectory of subsidies to that applied in the solar PV industry, EU domestic production of EVs would decline by 70 per cent and EU producers’ global market share would fall by 30 percentage points,” he wrote.
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Chinese EV maker Xpeng unveils budget car models priced under US$17,000
Chinese EV maker Xpeng unveils budget car models priced under US$17,000
The EU-China EV dispute has threatened to spiral into a broader trade war with Beijing triggering investigations into food and drink imports and threatening action against European car firms.
However, there have been signs in recent weeks that both sides are keen to avoid a major conflict. Last week China declined to impose provisional duties on French cognac, despite publishing evidence of dumping in the sector. However, the industry expects duties to be imposed at a later date.