European Commission Imposes Provisional Duties on Chinese Electric Vehicles
The European Commission announced on Wednesday that it would impose provisional duties of up to 38.1% on imports of Chinese electric vehicles. This decision may provoke retaliation from China.
Reactions from Carmakers
Ola Kaellenius, CEO of Mercedes Benz: “As an exporting nation, what we do not need are increasing barriers to trade. We should work on dismantling trade barriers in the spirit of the World Trade Organisation.”
Cui Dongshu, Secretary General of the China Passenger Car Association: “The EU’s provisional tariffs come basically within our expectations, which won’t have much of an impact on the majority of Chinese firms.”
France’s PFA Car Lobby Group: “The EU market is the most open in the world. However, in the context of the historic transformation it is facing, the sector has never been more in need of a level playing field: competition, yes, but fair competition. The European authorities’ guidelines in favour of all-electric vehicles from 2035 only reinforce the requirement to defend European interests against any possible anti-competitive practices.”
Hildegard Mueller, President of Germany’s VDA Industry Body: “This measure further increases the risk of a global trade conflict. The potential damage that could result from the measures now announced may be greater than the potential benefits for the European—and in particular the German—automotive industry.”
ACEA, the European Automobile Manufacturers’ Association: “ACEA has consistently affirmed that free and fair trade is essential in creating a globally competitive European automotive industry, while healthy competition drives innovation and choice for consumers. Free and fair trade means guaranteeing a level playing field for all competitors, but it is just one important part of the global competitiveness puzzle.”
Chinese EV Maker NIO: “We strongly oppose the use of increased tariffs as a strategy to obstruct the normal global trade of electric vehicles. This approach hinders rather than promotes global environmental protection, emission reduction, and sustainable development. In Europe, NIO’s commitment to the EV market remains unwavering, and we will continue to serve our users and explore new opportunities within Europe despite protectionism. We will closely monitor the situation and make decisions that align with the best interests of our business. As the ongoing investigation has yet to reach a conclusion, we remain hopeful for a solution.”
Spanish Car Manufacturers’ Association ANFAC: “ANFAC traditionally defends free competition in the market, regardless of where a commodity comes from, as long as all transactions are carried out in compliance with current international trade legislation and have occurred under conditions of equality. If there is someone who fails to comply, he must be penalized for it. The automobile annually contributes more than 18 billion euros of positive trade balance to the Spanish economy, and our future depends on the survival of a global and open market in which to develop the competitiveness of our industry. Likewise, we defend that the European Union, and especially Spain, develop a strong industrial policy that encourages the production and manufacturing of electric vehicles in our country, and attracts new investments, all in a manner compatible with free trade and regulation of defence of competition.”
Government Reactions
Lin Jian, Chinese Foreign Ministry Spokesperson: “This anti-subsidy investigation is a typical case of protectionism. The European side imposed tariffs on electric vehicles imported from China, which violates the principles of market economy and international trade rules, damages China-EU economic and trade cooperation and the stability of the global automobile production and supply chain. It will ultimately undermine Europe’s own interests. We urge the EU to abide by its commitment to support free trade and oppose protectionism, and work with China to safeguard the overall situation of China-EU economic and trade cooperation. China will take all necessary measures to firmly safeguard its legitimate rights and interests.”
Teresa Ribera, Energy Minister, Spain: “I believe that the European automotive industry is an extremely important industry that needs to catch up in terms of the transformation of models, of mobility proposals and to move towards electric cars. Obviously, if this breach of international trade rules occurs, we must support the Commission’s proposal and obviously it is also our obligation to support the European automobile industry as a whole and, in particular, the Spanish industry, so that it remains a competitive, modern, up-to-date industry with a significant weight in international markets.”
Italy’s Industry Minister Adolfo Urso: “I welcome the EU’s announcement.”
Analysts and Experts
Frank Schwope, Automotive Industry Lecturer at the University of Applied Sciences FHM Hannover: “The tariffs have turned out to be lower than many feared and are initially a plan that can still be revised. The measures are a disaster for European car buyers and for German car manufacturers. The heads of BMW, Volkswagen and Mercedes-Benz had clearly spoken out against such punitive tariffs. China is by far the most important sales market for all German car manufacturers. However, French car manufacturers, for whom China is an insignificant market, would benefit from measures against Chinese imports to Europe. Punitive tariffs will of course provoke countermeasures from the Chinese government.”
Will Roberts, Head of Automotive Research at Research Firm Rho Motion: “Chinese manufacturers should be able to absorb some of these lower tariff levels into their padded profit margins. The true test from today’s announcement will be whether Beijing will retaliate in kind, or come to an amicable solution. Europe’s manufacturers still rely on the Chinese market, so declining profits from the East would only slow their ability to transition effectively.”
Julia Poliscanova, European Environmental Group Transport & Environment: “The European Commission Green Deal came with the promise of growth and jobs, and that’s not possible if our EVs are all imported. The tariffs are welcome but Europe needs a strong industrial policy to speed up electrification and localise manufacturing. Just introducing tariffs while scrapping the 2035 deadline for polluting cars would slow down the transition and be self-defeating.”
Andrew Kenningham, Chief Europe Economist, Capital Economics: “The immediate effect of the additional duties would be very small in macroeconomic terms. The EU imported around 440,000 EVs from China in the twelve months ending in April, which were worth €9bn or around 4% of household expenditure on vehicles. But the anti-subsidy duties are intended to limit the future growth in EV imports which would otherwise take place rather than to block existing trade. The decision marks a big change in EU trade policy because, although the EU has used trade defence measures regularly in recent years, including against China, it has not previously done so for such an important industry. And Europe has been reluctant to engage in the kind of protectionism that the US has deployed since Donald Trump’s presidency.”
Markus Ferber, German Member of European Parliament: “In imposing tariffs on Chinese electric vehicles, the European Commission has made the right call. In trade policy, the European Commission can no longer just watch Chinese dumping practices like a deer caught in the headlights. If the European Union is serious about building up a competitive EV industry, we need to fight back. We cannot expect European carmakers to invest massively into new capacities while they are undercut by Chinese dumping practices. We have seen this story play out once before in the solar industry and it did not have a happy ending. We would be wise not to make the same mistake twice. Tariffs and other trade barriers are only ever the last-call option, but if the competition is not playing fair, there is no other way. This is not an act of protectionism, but rather a measure that levels the playing field.”
