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Finbarr Bermingham

Punitive European Union tariffs on Chinese-made electric vehicles will be lowered following consultations with the companies affected, according to sources familiar with the matter.
Tesla will once again be the big winner, having its proposed tariff rate lowered for a second time to 7.8 per cent from 9 per cent.
Chinese firms SAIC and Geely will have their rates lowered from 36.3 per cent to 35.3 per cent and from 19.3 per cent to 18.8 per cent, respectively.
These duties will be applied in addition to the base rate 10 per cent tariff the EU applies to all EV imports. The news was first reported by MLex, a regulatory news service.
Chinese government officials have been scrambling to strike a deal with the European Commission to end the dispute before the EU’s 27 member states hold a vote later this month that could see the duties written into law for a five-year period.
During the vote, 15 of 27 member states accounting for 65 per cent of the bloc’s population would have to go against the tariffs to stop them.
On Monday, the vice-minister of commerce Li Fei sat down with senior EU officials in Brussels for talks ahead of a meeting expected to take place next week between Commerce Minister Wang Wentao and outgoing EU trade chief Valdis Dombrovskis.
“The electric vehicle anti-subsidy case is complex and has a wide impact. It is challenging for China and the EU to reach an agreement through consultations,” the Chinese commerce ministry said on Tuesday.


It urged the EU to “show sincerity” and said the two sides could resolve each other’s concerns, adding: “China is willing to continue to work closely with the EU to reach a solution that is in the common interests of both sides and in line with WTO rules as soon as possible.”
Although Brussels is willing to talk, there is scepticism as to whether it is possible to cut a grand bargain: any Chinese proposal would have to mirror the effect of the anti-subsidy duties, which would be applied by October 31 at the latest.
The EU says Chinese subsidies are allowing companies to export their cars to Europe at a discount, making locally made models less affordable. Beijing has denied that this is the case, and said that the sector’s success is a result of planning and innovation.
Even the EU’s top tariff – the 35.3 per cent plus 10 per cent base rate for SAIC – is low compared with some other major Western markets, including the United States and Canada, which have moved to impose 100 per cent import duties.
In a report published on Monday, the former Italian prime minister Mario Draghi said that higher tariffs elsewhere will continue to make the EU an accessible market for subsidised Chinese products.
“In response to perceived unfair competition, an increasing number of countries are raising tariff and non-tariff barriers against China, which will redirect Chinese overcapacity towards the EU market,” the former European Central Bank chief added.
He said that keeping the EU market open to Chinese-made EVs would “be unlikely to succeed” since it could jeopardise jobs.
“According to ECB simulations, if the Chinese EV industry were to follow a similar trajectory of subsidies to that applied in the solar PV industry, EU domestic production of EVs would decline by 70 per cent and EU producers’ global market share would fall by 30 percentage points,” he wrote.


The EU-China EV dispute has threatened to spiral into a broader trade war with Beijing triggering investigations into food and drink imports and threatening action against European car firms.
However, there have been signs in recent weeks that both sides are keen to avoid a major conflict. Last week China declined to impose provisional duties on French cognac, despite publishing evidence of dumping in the sector. However, the industry expects duties to be imposed at a later date.


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Can joint ventures fix China’s trade imbalance with the EU and US?

China-EU relations

EU proposes lower tariffs on Chinese-made electric vehicles after input from car makers

EU member states will have to vote on the plan in the coming weeks. Source: Bloomberg

Spanish PM Pedro Sanchez visits China ahead of key EU vote on electric vehicle tariffs

Spanish Prime Minister Pedro Sanchez will meet President Xi Jinping and other senior Chinese officials. Photo: dpa

China’s electric vehicle makers scramble for EU tariff deal, with price floor on the table

The EU has complained that cheap, exported Chinese vehicles threaten the future of the European car industry. Photo: AFP

The EU has complained that cheap, exported Chinese vehicles threaten the future of Europe’s car industry. Photo: AFP

Xpeng founder and CEO He Xiaopeng says his electric vehicle company is looking for a manufacturing site in Europe. Photo: Bloomberg

China opens tit-for-tat trade probe into EU dairy products day after bloc’s EV tariff move

Cheese imported from Europe is displayed at a supermarket in Beijing. Photo: AFP

China seeks WTO talks over EU’s EV tariffs, says trade rules ‘severely’ violated

New cars wait for transportation near a Sallaum Lines ro-ro ship seen by the dock in Yantai in east China’s Shandong province. Photo: AP

Employees work on the production line at a factory for Chery’s electric vehicles in Wuhu, Anhui province. Photo: Reuters

Cars await transport near a ship in Yantai in eastern China’s Shandong province on Tuesday. Photo: Chinatopix via AP

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China

Diplomacy

China Future Tech

The concession comes as Beijing is pushing for a deal with Brussels before the proposed duties come into force


The concession comes as Beijing is pushing for a deal with Brussels before the proposed duties come into force.


European Union

Electric & new energy vehicles

EVs: Policy

EVs: Geopolitics