The European Union is taking steps to support its domestic automakers who are struggling with competition from China’s low-cost electric vehicles (EVs). In an effort to help the continent’s car companies compete, the EU has announced tariff increases of up to 38% on imported Chinese EVs.
“The influx of subsidized Chinese imports at artificially low prices therefore presents a threat of clearly foreseeable and imminent injury to EU industry,” the European Commission said in a statement.
This tariff hike follows the launch of an ongoing anti-subsidy investigation by the European Commission into Chinese EV prices.
Investigators aim to determine whether the prices have been artificially lowered due to financial assistance from Beijing. Companies cooperating with the probe will face a 21% tariff, while those that do not comply will be subjected to the full 38% duty.
The new tariffs will impose billions of dollars in additional costs on Chinese car manufacturers. Western automakers — such as Tesla and BMW, which produce EVs in China — will also be affected by these increased tariffs.
Beijing has criticized the EU’s decision, warning that it could harm relations between Europe and China and threaten the stability of the global automotive supply chain. China’s Ministry of Commerce accused the bloc of “creating and escalating trade tensions” with this move.
Following the tariff announcement, shares of some leading European car manufacturers fell, reflecting fears of potential retaliatory actions from China.
Despite the EU’s measures, car companies in China remain optimistic. The Chinese Passenger Car Association stated that the tariff hike was anticipated and also predicted it would not significantly impact their automakers. The industry group still foresees considerable growth potential for Chinese-made EVs in the European market.
