The European Commission plans to impose five-year import duties of up to 36% percent on Chinese electric vehicles (EVs) unless there are concessions from Beijing in the current trade dispute over state subsidies, it announced on Tuesday August 20.
Last month, Brussels slapped Chinese EVs with hefty provisional tariffs, in addition to the 10% current duties. In contrast, Tesla cars that are made in China would face a lower duty of nine percent. An anti-subsidy probe accused Beijing of unfair competition against its European Union rivals.
The latest Commission draft plan proposes to fix the higher tariffs, with a deadline for alternative suggestions set for the end of the month. EU member states would then need to approve the plan by the end of October.
Chinese cooperation with Brussels would be rewarded with lower tariffs for individual firms of 21.3% (). According to a Commission representative:
The EU is open to reach a solution that would be an alternative solution to the imposition of duties that would be effective and WTO-compatible. We consider that it’s very much up to China to come up with alternatives.
As for Tesla, U.S. billionaire owner Elon Musk enjoys a combative yet pragmatic relationship with the EU on social media, but remains respected as a key provider of satellite services to the bloc. This makes him well-placed to push for preferential treatment for his own EV manufacturing operations in China.
Beijing is vociferously opposed to the EU tariff regime and has sought the intervention of the World Trade Organization (WTO) in the ongoing dispute. China’s role as a global EV production behemoth makes it well-placed to profit from European preoccupations with ‘Green deals’ and ‘Net Zero,’ meaning that to date almost 40% percent of Chinese EVs were destined for the EU.
