European Union member states have approved the European Commission’s proposal to impose new duties on imports of battery electric vehicles (BEVs) from China.
The European Commission – the EU’s executive arm – said it has obtained the necessary support from EU member states for the adoption of the tariffs. This, it said, represents another step towards the conclusion of the Commission’s anti-subsidy investigation.
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However, it also said the EU and China would “continue to work hard to explore an alternative solution that would have to be fully WTO-compatible, adequate in addressing the injurious subsidization established by the Commission’s investigation, monitorable and enforceable.”
Reuters reported that ten EU member states backed the tariffs, with twelve abstentions. Germany was among five member states that voted against the China tariffs proposal.
A European Commission investigation has concluded that Chinese-made BEVs have benefitted from unfair subsidies that make them cheaper than European made competition.
The new China-specific tariffs for BEVs would be on top of the existing 10% tariff applying to all cars imported to the EU from countries that don’t benefit from separate trade agreements.
However, Germany is reportedly concerned about rising trade tensions between the EU and China, especially in automotive trade. German OEMs have sunk big investment in manufacturing in JVs in China.
“I am not a fan of countervailing duties because this will likely lead to countermeasures and involve us in a tariff dispute, perhaps a tariff war, with China,” German Economy Minister Robert Habeck said earlier this week, according to Reuters. “I am working to find a political solution that will not drive us into a tariff war with China.”
A number of Chinese companies are also looking to set up manufacturing facilities inside the EU in order to avoid import tariffs.
