EU Adjusts Proposed Tariffs on Chinese Electric Vehicles

The European Union (EU) has marginally revised its proposed tariffs on electric vehicles (EVs) imported from China following additional information from affected companies. This update comes from a source who spoke anonymously.

New Provisional Rates:

The newly proposed provisional rates, which will be added to the existing 10% duty, are as follows:

• Other EV producers in China that cooperated with the investigation but were not sampled: Subject to a weighted average duty of 20.8%.
• Firms that did not cooperate Faced an additional 37.6% levy.

Background and Notification:

The European Commission, the EU’s executive arm, notified the companies earlier this month about the tariffs. This announcement followed an investigation into subsidies provided by China and its state-backed banks to benefit manufacturers.

Provisional tariffs will be introduced on July 4, and definitive duties are expected to take effect by November. Tesla Inc. may receive an individually calculated duty rate at the definitive stage following a request to be sampled.

China’s Response and Potential Retaliation:

China has threatened to retaliate and initiated a targeted anti-dumping probe on pork imports. Findings from an investigation into EU spirits are also expected in the coming months. Beijing has warned it could impose measures on agricultural goods, aviation, and cars with large engines.

Diplomatic Efforts and Ongoing Consultations:

Several carmakers and member states, including Germany, have urged the EU and China to negotiate. Both sides are currently consulting on a way forward, but for the EU, any solution must be grounded in World Trade Organization rules and address the underlying issue.

Beijing has attempted to transform the discussions into a swap and has been trying to divide member states by pressuring them bilaterally, as previously reported by Bloomberg.

Provisional Duties and Collection:

According to a statement by the EU last month, the provisional duties are being introduced by a guarantee and will only be collected if and when definitive duties are imposed.