China calls on EU to scrap EV tariffs

13th Jun 2024 12:07

(Sharecast News) - Beijing has urged the European Union to abandon newly-announced tariffs on Chinese electric vehicles, accusing it of "politicising" trade.

Brussels told car manufacturers on Wednesday that following an investigation, it would provisionally apply duties of between 17% and 38% on imported Chinese EVs from next month.

The charges will be applied on top of an existing 10% import duty, meaning some manufacturers could face charges as high as nearly 50%.

They are, however, well below the 100% tariffs announced by the US last month on imports of Chinese EVs.

Both the US and Europe are looking to boost homegrown industry and protect domestic manufacturers from cheaper Chinese competitors in a range of areas, and especially in EVs.

The European Commission told the Financial Times on Wednesday: "We have no option but to act in the face of soaring imports of heavily-subsidised battery electric vehicles from China. This puts our industry at risk of injury."

However, in a press conference on Thursday, Beijing was highly critical of the move.

According to Reuters, foreign ministry spokesperson Lin Jian told reporters: "We urge the EU to listen carefully to the objective and rational voices from all walks of life, immediately correct its wrong practices, stop politicising economic and trade issues and properly handle economic and trade frictions through dialogue and consultation."

Chinese car manufacturer Geely also expressed "great disappointment", and said it would take "all necessary measures" to safeguard its rights. State-controlled rival SAIC said it was "deeply concerned", Reuters noted.

SAIC, which has joint ventures with Volkswagen and General Motors, is China's largest automaker.

Rabobank said: "It is clear that Beijing intends to counter Europe's tariffs with anti-trade measures of its own. China has already warned Brussels that its aviation and agriculture sectors could become the targets of retaliatory tariffs.

"Worse, what if China doesn't strike back through tariffs, but instead decides to impose export bans on key commodities and inputs? That could raise European input costs and prices across sectors.

"Given Europe's internal divisions when it comes to the automobile industry, China may have an even stronger incentive to retaliate. This could drive a further wedge between EU countries."