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BRUSSELS: The EU today decided to slap hefty tariffs on Chinese-made electric cars after an anti-subsidy probe concluded Beijing’s support to local manufacturers was unfair.
The extra taxes have been controversial, with strong opposition from Germany and Hungary amid fears of provoking China’s ire and setting off a bitter trade war.
Beijing slammed the European Union’s “unfair, non-compliant and unreasonable protectionist practices” during the probe.
The duties will come on top of the current 10% on imports of electric vehicles from China, according to a text published online by the European Commission, which runs the EU’s trade policy.
The decision will become law after publication in the EU’s official journal tomorrow and the additional tariffs will then enter into force from Thursday.
Brussels’s probe found that China’s state subsidies were unfairly undercutting European automakers.
Once they come into effect, the tariffs will be definitive and last for five years.
The extra duties also apply, at various rates, to vehicles made in China by foreign groups such as Tesla – which faces a tariff of 7.8%.
Chinese car giant Geely – one of the country’s largest sellers of EVs – faces an extra duty of 18.8%.
The tariffs do not have the support of the majority of the EU’s 27 member states but in a vote early this month, the opposition was not enough to block them – which would have required at least 15 states representing 65% of the bloc’s population.
The EU launched the probe in a bid to protect its automobile industry, a major industrial player that provides jobs to around 14 million people.
But Europe’s bigger carmakers, including German auto titan Volkswagen, have criticised the EU’s approach and have urged Brussels to resolve the issue through talks.
Volkswagen, which has been hit hard by rising competition in China, said the tariffs would not improve the competitiveness of the European automotive industry,
That warning came weeks before the ailing giant announced plans yesterday to close at least three factories in Germany and cull tens of thousands of jobs.
Talks continue between the two sides and the duties can be lifted if they reach a satisfactory agreement, but Chinese and European officials have pointed to gaps and differences.
The EU now faces China’s fury and possible retaliation.
China on Oct 8 said it would impose provisional tariffs on brandy imported from the EU.
Beijing has also launched probes into EU subsidies of some dairy and pork products imported into China.
Trade tensions between China and the EU are not limited to electric cars, with Brussels also investigating Chinese subsidies for solar panels and wind turbines.
The EU is not alone in levying heavy tariffs on Chinese electric cars.
Canada and the US have in recent months imposed much higher tariffs of 100% on Chinese electric car imports.