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China Calls on EU to Reconsider Tariffs on Electric Vehicles, Deems Current Direction as Misguided

China Calls on EU to Reconsider Tariffs on Electric Vehicles, Deems Current Direction as Misguided

“China Urges EU to Reverse Tariffs on Chinese Electric Vehicles, Citing Detrimental Effects on Industry Competition”

Beijing has expressed hope for the European Union to reconsider tariffs imposed on Chinese electric vehicles, asserting that such measures represent a misguided approach aimed at shielding the EU’s auto industry from competition. State news agency Xinhua reports that China, along with other parties involved in the dispute, including European and Chinese car manufacturers as well as industry groups, strongly opposes the EU’s decision and seeks to de-escalate tensions.

China has announced intentions to take measures to protect its interests following the European Commission’s announcement of additional duties, reaching up to 38.1%, on imported Chinese electric cars starting from July. Reuters estimates that these tariffs could result in billions of euros in additional costs for carmakers, based on EU trade data from 2023.

Xinhua emphasized in a commentary that given their economic structures and vast scale, China and the EU would benefit from collaboration on major economic and trade matters. The commentary suggested that it would be more beneficial for the EU to leverage China’s strengths to develop its own electric vehicle industry.

The EU’s decision comes shortly after the United States revealed plans to increase duties on Chinese electric vehicles to 100%. Brussels has stated its intention to counteract Chinese subsidies with additional tariffs ranging from 17.4% for BYD to 38.1% for SAIC, on top of the standard 10% car duty, bringing the highest overall rate to nearly 50%. China’s auto industry, comprising state-owned and private firms, enjoys cost advantages over foreign competitors partly due to government subsidies and the nation’s dominance in battery minerals refining.

The EU’s provisional duties are expected to take effect by July 4, with the investigation ongoing until November 2. Definitive duties, typically lasting for five years, could be imposed after this period. Some Chinese electric vehicle makers and suppliers have initiated investments in European production facilities to bypass tariffs.

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