EU poised to vote on up to 35% tariffs for Chinese electric cars

On Friday, October 4, the countries of the European Union are set to vote on imposing tariffs on the import of electric cars from China, according to Bloomberg's findings. China strongly opposes these tariffs, as access to the European market is crucial for them.

Some time ago, the European Union conducted an investigation into the subsidization of electric cars produced in China that are entering markets including Europe. After concluding the investigation, the European Commission found that China subsidizes the production of electric cars, allowing them to sell the cars at artificially low prices.

This has raised concerns within the Union that the European automotive industry will become another sector unable to cope with unfair competition from China. For example, currently, 90 percent of photovoltaic panels sold in the EU come from China.

Therefore, the EC announced tariffs on Chinese electric cars, ranging from 7.8% to 35.3%. This is in addition to the already existing 10% tariffs in the EU on imported cars. The tariff amount depends on the extent to which the company was subsidized and whether it cooperated with the EC during the investigation. The tariffs will not only impact Chinese companies but also non-Chinese corporations producing in China. For instance, American Tesla will be subject to a 7.8% tariff.

The final decision will be made by a vote of the member states, which must occur before October 10. According to Saturday's Bloomberg reports, the vote will take place on Friday, October 4.

Rejecting the tariffs would require a so-called blocking majority, meaning at least 15 countries representing 65% of the EU's population would have to vote "against" them. So far, countries signaling opposition to the tariffs include Spain, Germany, Slovakia, and Hungary.

After a meeting in early September with Chinese leader Xi Jinping, Spanish Prime Minister Pedro Sanchez announced that Madrid's position on tariffs is being "reconsidered" and called on the EC to "avoid a trade war" between the EU and China.

These words were supported by a spokesperson for the German government, describing them as "a direction we share." The German automotive industry is heavily dependent on the Chinese market—about one-third of German car exports are destined for China.

Last week, Chinese Trade Minister Wang Wentao visited Berlin, Rome, and Brussels, announcing that he would negotiate an agreement with the Union "until the last minute" to persuade the bloc to back down from the tariffs. However, Beijing's proposal to introduce commitments on the prices of Chinese vehicles sold in the EU was rejected. The EC stated that they would not eliminate the harmful effects of subsidies.

"Initiating an investigation into the subsidization of electric cars produced in China in the name of reducing the risks they pose to European automotive companies, the European Commission not only departed from existing global trade norms but also betrayed its solemn commitment to promote free and fair trade" wrote Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Cooperation, which is affiliated with the Ministry of Commerce, in a commentary for "China Daily" on Thursday.

According to him, the EU has been slowly but steadily moving towards protectionism over the past decades, earning it the nickname "Fortress Europe." "The economic policy of the Community, increasingly characterized by restrictive innovation regulations, has led to a decline in its economic vitality and global influence," he added. He contrasted the Union's approach to China, which he described as "a responsible member of the global trade community."