The European Union announced plans to start custom registrations of Chinese-made electric vehicles as it seeks to impose retroactive tariffs, Reuters reports.
However, the EU’s trade investigation has yet to prove that the Chinese electric automakers are really benefitting from unfairly high subsidies.
The European Commission moves toward hitting Chinese automakers with EV tariffs
According to the report, electric vehicle imports from China may face tariffs if the European Commission confirms unjust subsidies to protect local automakers.
The Commission declared that it had finally accumulated sufficient evidence to prove that Chinese-made EVs receive unfairly high subsidies and that imports grew by 14% year-on-year since the probe started last year.
Ongoing anti-subsidy probe
The European Commission initiated the anti-subsidy investigation into Chinese-made electric vehicles last October 2023 as it seeks to determine potential tariff imposition to protect local brands from extremely cheap product imports.
The Commission claims that China has not been fair in competing in the electric vehicle market, citing evidence that shows how the government provides “unfair” subsidies to electric vehicles exported to Europe.
The investigation is due to end by November 2024. Nonetheless, the EU could launch provisional duties in July.
Significance
The European Commission’s anti-subsidy investigation against electric vehicle imports from China is crucial to ensure the local industry’s competence.
European electric automakers worry that they could suffer from a serious disadvantage if Chinese-made EVs continue to grow at this extremely rapid rate before the probe ends.
“At this stage it is possible that, on the basis of the data collected during the investigation, the injury, which would be difficult to repair, started to materialize even before the end of the investigation.”
European Commission’s published document on Monday
Therefore, it may be really crucial for the EU to start registering Chinese EV imports so they can be subjected to potential tariffs by the end of the probe to fix the induced damage to the local industry.
The China Chamber of Commerce to the EU expressed disappointment with the ongoing investigation, saying that the significant increase in EV imports only demonstrated growing electric vehicle demand in the region.
