On July 4, the European Commission announced that after a nine-month anti-subsidy investigation on Chinese battery electric vehicles (BEVs), it has decided to impose provisional anti-subsidy duties on electric vehicles imported from China.
The provisional tariffs apply to certain Chinese automakers, with SAIC Motor facing a 37.6% tariff, Geely at 19.9%, and BYD at 17.4%. Other companies cooperating with the EU investigation face an average tariff of 20.8%, while those that did not cooperate face a 37.6% tariff. These finalized rates are slightly lower than the rates disclosed by the EU on June 12.
The provisional tariffs will take effect on July 5, 2024, and can last for up to four months. During this period, EU member states will vote on whether to convert these tariffs into permanent five-year duties. Currently, the EU and the Chinese government are engaged in technical discussions to seek a solution that complies with World Trade Organization (WTO) rules.
At a regular press conference of the Ministry of Commerce on July 4, Deputy Director of the Ministry of Commerce's Office and spokesperson He Yadong responded to media questions, stating that China has repeatedly expressed strong opposition to the EU's anti-subsidy investigation of Chinese electric vehicles. China advocates resolving trade disputes through dialogue and consultation. On June 22, Minister Wang Wentao held a video conference with European Commission Executive Vice-President and Trade Commissioner Valdis Dombrovskis, where they agreed to start consultations immediately to properly handle the case based on facts and rules. To date, several rounds of technical consultations have been held between China and the EU.
He Yadong pointed out that there is a four-month window before the final ruling. He expressed hope that the EU would work with China, demonstrate sincerity, accelerate the consultation process, and reach a mutually acceptable solution based on facts and rules as soon as possible.
Regarding the EU's decision to impose high provisional anti-subsidy duties, the China Chamber of Commerce to the EU issued a statement on July 4, firmly opposing what it calls a trade protectionist move driven by political factors. It stated that the high tariffs would severely impact China-EU trade in electric vehicles, significantly increase costs for EV companies, make business operations more difficult, damage the confidence of Chinese automakers in the European market, and negatively affect the EU's efforts to create a favorable environment for green economic development.
The China Chamber of Commerce to the EU believes that the EU should actively promote future collaboration between China and the EU in the automotive sector in areas such as technological innovation, infrastructure, and mutual recognition of standards. It also called on the EU to return to a multilateral approach that promotes free trade and global cooperation, rather than resorting to protectionism and imposing high tariffs.
BMW Group Chairman Oliver Zipse stated that the EU's decision to impose additional tariffs on Chinese electric vehicles is counterproductive. He argued that this move would not enhance the competitiveness of European automakers and could harm companies operating globally. Furthermore, the tariffs would limit the supply of electric vehicles to European consumers, delaying the decarbonization of the European transportation sector. Additionally, such actions severely undermine the EU's long-standing principles of free trade.
Mercedes-Benz Group also reiterated its support for free trade based on WTO rules, including the principle that all market participants should enjoy equal treatment. Free trade and fair competition bring prosperity, growth, and innovation to all parties. Allowing protectionist trends to rise would have negative consequences for all stakeholders.
Since the EU announced its plan to impose provisional tariffs on Chinese electric vehicles on June 12, various stakeholders, including industry associations like the German Association of the Automotive Industry (VDA), German automakers such as BMW, Mercedes-Benz, and Volkswagen, as well as Chinese automakers like SAIC Motor and Geely, have expressed clear opposition to the tariffs.
On July 3, the day before the EU's announcement, the VDA issued a statement opposing the EU's provisional anti-subsidy tariffs on Chinese electric vehicles. The VDA argued that this measure does not serve the EU's interests, as it would negatively impact European consumers and businesses, hinder the development of the EU's domestic electric vehicle market, and obstruct climate goals.
The VDA believes that in the medium to long term, Chinese electric vehicles will not flood the European market. Enhancing the competitiveness of the European automotive industry should be achieved through promoting innovation and free trade rather than relying on trade protection measures. The association called on the European Commission to abandon the provisional anti-subsidy tariffs on Chinese electric vehicles and resolve the issue through dialogue, working with China to ensure open markets, secure supply chains, and achieve environmental goals.
He Yadong noted that the Chinese side has observed that some EU member states' governments and major automakers have repeatedly expressed clear opposition to the EU's anti-subsidy measures against Chinese electric vehicles. He urged the EU to seriously listen to these voices within the EU, conduct rational and pragmatic consultations with China, and avoid anti-subsidy measures that would harm mutually beneficial cooperation and the common development of the China-EU automotive industry.
