EU slams tariff on Chinese electric cars, raising tension

The EU will impose new tariffs on Chinese electric vehicles, following provisional conclusions of an anti-subsidy investigation into the Chinese car industry, the European Commission announced on Wednesday (12 June). 

The new tariffs will increase import duties on Chinese-made battery powered electric vehicles (or BEVs) from 10 to up to 38 percent, depending on the manufacturer, taking effect on 4 July, according to a press release. 

The commission launched its anti-subsidy investigation in October last year over concerns that the Chinese electric-vehicle industry benefited from state aid, creating unfair competitive advantages.

Chinese electric cars are estimated to be 20 percent cheaper than their European counterparts, according to the commission, with their EU-market share of electric cars sales projected to rise to 15 percent this year.

The commission has been eager to prevent the EU’s solar-panel debacle, when a flood of cheap Chinese-made solar panels killed the EU’s domestic solar industry back in 2013, amid divisions between member states 

But with the highly strategic and politically sensitive car industry, however, things are proving to be different, with competition commissioner Margrethe Vestager warning that the EU could lose the “clean-tech race” at an event in April.

However, the EU has also wanted to avoid a full-fledged trade war with China, with EU Commission president Ursula von der Leyen promising that the subsidy investigation would be “fair and fact-based” back in October.