EU Approves Tariffs on Chinese EVs, Risking Beijing Retaliation

The European Union (EU) voted to impose more tariffs on Chinese-made electric vehicles (EVs), risking further retaliation from Beijing, which in August launched an anti-subsidy investigation into EU dairy imports.

The final tariffs reportedly could rise as high as roughly 45% when including the EU’s existing 10% tariff on imported vehicles. In preliminary versions of the plan, the European Commission, the EU’s executive arm, said that the tariffs would range between 9% and 36%.

The EU is wrapping up a lengthy investigation into whether Beijing’s subsidies allow Chinese EVs to be sold at such a low price that they are anti-competitive. The EU will present its “definitive findings” by Oct. 30.

EU Will Continue To Work With China Before Tariffs Finalized

The Commission said that it will continue to work with Chinese officials to find “an alternative solution” before the tariffs are finalized.

China has said there is no evidence that its imports harm the European market, and some EU members have voiced concerns that China could retaliate with its own new tariffs, as it has already opened its own investigation into dairy imports from the bloc.

Tariffs Boost Follows Similar Moves by US, Canada

Earlier this year, the U.S. and Canada boosted tariffs on Chinese EVs, with the White House saying the move was aimed at protecting American workers “from China’s unfair trade practices.”

In response to the proposed EU tariffs, in June Stellantis (STLA) announced it would shift some EV production from China, while Tesla (TSLA) said it would raise prices for its Model 3 in Europe.