Car industry EU introduces provisional punitive tariffs on e-cars from China
The EU is introducing provisional punitive tariffs on imports of electric cars from China on Friday (tomorrow). This is according to the EU Official Journal.
04.07.2024, 11:56
SDA
The punitive tariffs will affect, among others, the company BYD, which is currently sponsoring the European Football Championship on a large scale. The tariffs have no effect on car imports into Switzerland.
The provisional tariffs are the result of an investigation by the EU Commission. This revealed that the entire value chain for electric cars in China is heavily subsidized and that imports of Chinese electric cars pose a clearly foreseeable and imminent threat of damage to the industry in the EU. According to the Commission, Chinese electric cars are normally around 20 percent cheaper than models manufactured in the EU.
Tariffs of up to 38 percent
Specifically, the manufacturer BYD is facing a provisional punitive tariff of 17.4 percent, Geely 19.9 percent and SAIC 37.6 percent. Geely produces the electric Smart models #1 and #3 and the Volvo EX30, among others.
SAIC builds the MG4, which is popular in Germany and came in second place behind the VW ID.3 in the country's registration statistics for electric cars. For other manufacturers, 20.8 percent is planned, and companies that did not cooperate with the investigation would be subject to a 37.6 percent punitive tariff.
The final introduction of the punitive tariffs is to take place within four months, unless China makes surprising concessions. Until then, the tariffs do not have to be paid, only security deposits have to be provided.
Tariffs do not apply to Switzerland
Switzerland is under no obligation to follow trade defense measures or other tariff decisions made by the EU, a spokesperson for the State Secretariat for Economic Affairs (Seco) told the Keystone-SDA news agency on request. In principle, trade protection measures are not in Switzerland's interests.
Furthermore, Switzerland has no longer levied customs duties on imported industrial goods, including cars, since January 1, 2024. In addition, the free trade agreement with China provides for a complete exemption from customs duties on industrial products originating in China. If Chinese cars are imported directly into Switzerland, they can continue to be imported duty-free.
Concerns about countermeasures
The EU Commission's approach is causing concern in Germany, as there are fears of retaliatory measures that could affect German car manufacturers in particular. China is the largest car market in the world and, according to the German Association of the Automotive Industry (VDA), was the third-largest export market for cars from Germany in 2023 - after the USA and the UK.
However, German companies could not only be affected by countermeasures, but also by the EU measures themselves - as some of them produce in China for export. With a view to possible retaliatory measures by China, the German Association of the Automotive Industry (VDA) recently warned that if China were to introduce import duties on vehicles with an engine capacity of more than 2.5 liters, this would hit the industry hard.
Negotiations between Brussels and Beijing
Talks were recently held between Chinese Trade Minister Wang Wentao and EU Trade Commissioner Valdis Dombrovskis, among others. However, whether they will lead to a settlement of the trade conflict is completely open. The EU Commission has repeatedly emphasized that a negotiation outcome must eliminate the influence of harmful subsidies. Talks between Brussels and Beijing are to continue in the coming weeks.
If the authority headed by Ursula von der Leyen comes to the conclusion that China is not making sufficient progress, it can present a proposal for the introduction of definitive punitive tariffs in the next four months. The EU member states would only be able to stop the proposed tariffs if a so-called qualified majority opposes the proposal.
As a rule, a qualified majority means that at least 15 EU states, which together make up at least 65% of the total population of the Union, must agree. If there is no qualified majority for or against the proposal, the Commission can either adopt it or submit a new, amended version.
