THE European Commission announced plans Wednesday to impose provisional anti-subsidy duties on Chinese-made electric vehicles (EVs), including those from Shenzhen-based BYD, which will face the lowest tariff rate among affected manufacturers.

The tariffs, effective July 4, come in response to what the commission describes as the “unfair subsidization” of China’s EV industry, which the European Union (EU) claims is a treat to EU manufacturers.

The new tariffs will vary by company: 17.4% for BYD, 20% for Geely, 38.1% for SAIC Motor, and 21% for other manufacturers. Tesla vehicles imported from China may be subject to a separate rate. These tariffs are in addition to existing 10% import tariffs for non-EU EV makers.

BYD, Geely, and SAIC were investigated in the EU probe, which is ongoing.

Other Chinese EV firms, which cooperated in the investigation but have not been sampled, would be subjected to 21% in extra tariffs while those which did not cooperate in the investigation would face 38.1% in additional tariffs, the commission said.

The commission has reached out to Chinese authorities to discuss its findings and explore resolutions in a WTO-compatible manner. “Should discussions with Chinese authorities not lead to an effective solution, these provisional countervailing duties would be introduced from July 4,” the commission said.

The Chinese Chamber of Commerce to the EU (CCCEU) expressed shock and dissatisfaction, calling the decision protectionism. They argue the tariffs will harm China-EU trade and automotive cooperation. A survey conducted by the CCCEU indicates that the addition of even a 10% tariff would severely impact Chinese car manufacturers’ exports to Europe.

China’s Minister of Commerce Wang Wentao refuted EU and U.S. claims of unfair competition, accusing them of using high tariffs, discriminatory subsidies, and unilateral sanctions to exclude Chinese companies from their markets. Foreign Ministry spokesperson Lin Jian criticized the anti-subsidy investigation as a typical case of protectionism.

Despite China’s global EV dominance, exports to the EU accounted for only about 5% of China’s EV production in 2023. These exports primarily involved European and U.S. brands manufactured in China. Chinese EV brands have a smaller market share in Europe compared to local companies.

Several European automotive industry representatives and politicians have voiced opposition to the tariffs.

Investment bank CLSA issued a research report, saying it believes the 17.4% tariff on BYD is more moderate than the market expected. According to the bank’s survey of local dealers, BYD may respond to the tariff by raising prices, reducing dealer incentives, and absorbing some of the profit loss. BYD’s stock rose 4.16% to close at 252.99 yuan (US$35.57) on the Shenzhen Stock Exchange on Thursday. (SD-Agencies)

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