EU Divided Over Tariffs on Chinese-Built Electric Vehicles

EU countries are weighing whether to support additional tariffs on Chinese-built electric vehicles, highlighting Brussels’ challenge in building support for its largest trade case yet as Beijing threatens wide-ranging retaliation.

According to a government source, Germany, whose carmakers made a third of their sales last year in China, wants to stop the tariffs, while France has been among the firmest backers.

Mixed Reactions Among EU Members:

According to an informal poll by Reuters of EU governments, a majority of countries are still weighing the pros and cons of the escalating trade spat.

The issue will be put to members in an advisory vote in the coming weeks, the first official test of support in a landmark case for the Commission. The EU initiated the probe without an industry complaint, which was the first such trade case.

Proposed Tariffs and Key Players:

The bloc is set to confirm on Thursday provisional duties of up to 37.6% on Chinese brands such as BYD, Geely, and SAIC, as well as on China-made models of Tesla, BMW, and other Western automakers.

EU members will also vote in October if the Commission proposes multi-year tariffs at the end of its investigation. These would be blocked if a “qualified majority” of at least 15 countries representing 65% of the EU population votes against them.

Support and Opposition Within the EU:

France, Italy, and Spain, which account for 40% of the EU population, have indicated they would support tariffs. “Europe must defend itself if our companies are harmed and do not compete on equal terms,” Spain’s economy ministry said.

However, the Czech Republic, Greece, Ireland, and Poland were still debating the issue, official and government sources said, while Belgium has a caretaker government and the Dutch only got a government this week.