EU adopts tariffs on Chinese EVs as Germany opposes trade measure

MENA Newswire News Desk: The European Union will proceed with imposing significant tariffs on Chinese-made electric vehicles (EVs), despite opposition from key member Germany, the EU Commission announced Friday. The move, which follows a contentious vote, marks the bloc’s largest trade dispute with China in over a decade.

The tariffs, which could reach up to 45%, will add billions of dollars in costs for automakers importing vehicles from China. The duties are set to begin next month and will remain in place for five years. The Commission, which oversees the European Union’s trade policies, stated the tariffs aim to counter unfair Chinese subsidies, following a year-long anti-subsidy investigation. Despite the tariffs, the Commission indicated that discussions with Beijing will continue, with a potential compromise involving minimum sales prices.

The vote on Friday saw 10 EU member states supporting the tariffs, five voting against, and 12 abstaining, according to EU sources. To block the tariffs, a qualified majority of 15 member states, representing 65% of the EU’s population, would have been required. Key supporters of the tariffs include France, Italy, and Poland, while Germany, the EU’s largest economy and a major car producer, opposed the measure. Senior advisor at Rhodium Group, Noah Barkin, described the vote as a victory for the Commission, which had been under intense pressure from both Germany and China.

However, Barkin noted that there is a risk of Beijing retaliating, which could derail the possibility of a negotiated solution. European automakers, including Renault and Volkswagen, saw their shares rise in response to the vote, as the tariffs are expected to help them compete with Chinese EV makers in Europe. However, concerns have emerged that the tariffs may prompt Chinese companies to accelerate plans to build production facilities within the EU.

In response to the planned tariffs, China’s Ministry of Commerce expressed strong opposition, calling the measures “unfair” and in violation of World Trade Organization rules. The Chinese government has threatened to raise import duties on European products, including luxury items such as brandy and pork, in retaliation. The EU tariffs range from 7.8% for companies like Tesla to as high as 35.3% for manufacturers that did not cooperate with the investigation, such as SAIC Motor Corporation. The new tariffs are in addition to the EU’s standard 10% import duty on vehicles.