Ireland was among several EU countries that voted to push ahead with substantial tariffs on electric vehicles (EV) imported from China, despite concerns from Germany that the move could lead to a trade war with Beijing.
The heavy tariffs had provisionally been placed on Chinese electric cars in June, with a vote to approve the trade measures for a five-year period passing on Friday.
The European Commission proposed levying the tariffs following an investigation that concluded China was heavily subsidising its electric car industry, allowing its imports to flood the EU market at costs that undercut European car makers.
Germany opposed the tariffs, in part due to its carmakers’ concerns they would suffer in the fallout of retaliation from China. Spain also recently pushed for the EU to negotiate a compromise that avoided the need to place tariffs on Chinese EVs. It is understood Ireland was among the countries who voted to go ahead with the tariffs.
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A spokesman for the commission, which is the executive arm of the EU responsible for trade, said the measures were needed to “re-establish a level playing field” on electric vehicles. “We do not and have never wanted to impose tariffs for the sake of imposing tariffs,” he said. The defensive trade measures will enter into force from the end of October and will last for a period of five years.
The hiking of duties is expected to lead to further retaliation from the Chinese government, who recently opened an anti-subsidy investigation targeting dairy products the EU exports to China.
EU and Chinese officials had been involved in negotiations over the proposed EV tariffs in recent weeks, which will continue. The commission has said if China found a way to offset the advantage its subsidies had given its EV industry, the EU could lift tariffs. This would likely take the shape of an undertaking that companies would not import EVs below a set minimum price.
In a statement, the China Chamber of Commerce to the EU said it was “strongly dissatisfied with the EU’s adoption of protectionist trade measures”.
Cheaper Chinese EV imports have commanded an increasing share of the EU market in recent years, leading to concern in Brussels that the European electric car industry was being smothered.
The commission’s anti-subsidy investigation found a number of examples of the Chinese state giving its domestic industry a leg up, such as by providing materials at below-market prices, tax exemptions, and bank loans with preferential rates for EV producers.
The tariffs also apply to vehicles imported into the EU that were produced by US or other multinational companies, if the factories where they were made were based in China.
Vehicles produced by SAIC will face tariffs of 35.3 per cent, BYD is subject to 17 per cent tariffs. Import duties of 18.8 per cent will be put on Geely, the Chinese company that owns Volvo. Elon Musk’s Tesla electric carmaker is to face tariffs of 7.8 per cent on EVs it makes in China imported to the EU.
Other electric car makers in China who did not co-operate with the EU subsidy inquiry will be hit with tariffs of 35.3 per cent. The new tariffs will apply on top of existing levies of 10 per cent on electric vehicles imported into the EU.
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