By Philip Blenkinsop

EU Approves Tariffs on Chinese Electric Vehicles

BRUSSELS (Reuters) – The European Union has formally approved tariffs on Chinese-made electric vehicles (EVs) following an investigation that has divided the bloc and drawn retaliation from Beijing.

Tariff Rates

The European Commission has established rates ranging from 7.8% for Tesla to 35.3% for manufacturers like China's SAIC, which are considered non-cooperative with the EU's anti-subsidy probe. These tariffs are in addition to the EU's standard 10% car import duty.

Effective Date

The tariffs will take effect from Wednesday and remain in place for five years. Provisional duties dating back to July will not be collected, as companies were able to cover them with a bank guarantee.

Vote Outcome

The decision for definitive tariffs followed a vote by the EU's 27 member states on October 4, with 10 in favor, five against, and 12 abstentions.

Talks with China

Despite the imposition of tariffs, the Commission is open to negotiating alternatives with China. Both parties have agreed to a ninth round of technical negotiations, though significant gaps remain. The Commission is considering previous minimum price agreements, which have generally been for homogenous goods.

China's Response

In retaliation, China has begun anti-dumping investigations into EU pork and brandy exports and is probing EU dairy products for subsidies. Discussions have also been held regarding increasing import duties on large-engined gasoline vehicles, impacting German manufacturers most.

Next Steps

Companies outside the initial sample, such as BYD and Geely, may request an “accelerated review” for an individual duty within nine months of the definitive measures. An “interim review” can occur after one year if duties are deemed unnecessary or insufficient.

Legal Challenges

Affected parties can challenge the measures at the European Court of Justice, and China is already contesting them at the WTO. Both legal paths may take over a year to resolve. The Commission believes its investigation and response are compliant with WTO regulations.