The European Commission is preparing to announce its final decision on whether to impose provisional tariffs on Chinese electric vehicle imports on June 10, a day after the elections for the European Parliament.
Chinese EVs may face hefty import tariffs in Europe
According to Reuters, the European Commission will finally declare the import tariffs it plans to inflict on China-made electric vehicles.
The decision results from the concluding anti-subsidy investigation on low-cost Chinese EVs.
As previous reports revealed, European automakers are struggling to compete in the local market due to the surge of cheap EVs from China.
This situation prompted the EU to initiate a probe to determine if these EV imports benefit from unfair government subsidies.
Decision could spark retaliatory measures from Beijing
The European Union’s decision could potentially stimulate retaliation from the Chinese government.
In particular, German automakers heavily rely on sales in the Chinese market. Other European automakers also import their own China-made offerings. Therefore, they are in the most vulnerable position amid the intensifying trade tension between the EU and China and the possible retribution from Beijing.
“If provoked, the reaction and repercussions could lead to a trade war which would be devastating for a region that is still heavily dependent on Chinese dominated supply chains in order to achieve its lofty climate goals.”
Will Roberts, Automotive Research Head at Rho Motion
Nonetheless, European Commission President Ursula von der Leyen contended that the bloc must promptly act to prevent Chinese automakers from dominating the local industry with their heavily subsidized EVs.
Ongoing process
The European Commission’s pre-disclosure notice comes several weeks before the provisional measures deadline set on July 4. However, these potential tariffs could be retroactively imposed on imports in the previous 90 days.
Interested parties can get three working days to raise concerns over the Commission’s calculation accuracy.
The EU’s investigation into Chinese electric vehicle imports will conclude in late October, according to the report. They will then decide on potential tariffs, which could last for five years. The tariffs would apply unless a significant number of EU governments disagree.
This process offers sufficient time for potential negotiations between Brussels and Beijing. Industry analysts expect tariffs of between 10% and 25%.
