European Union to impose tariffs on Chinese cars

The EU is expected to announce today it is imposing tariffs on Chinese cars coming to Europe, according to reports.

The EU is said to have notified car makers that it would apply additional duties of up to 38.1% on imported Chinese electric vehicles from next month, according to Reuters.

This follows hard on the US imposing 100% tariffs on Chinese EVs. Reuters reported that Brussels would set tariffs of 17.4% for BYD, 20% for Geely and 38.1% for SAIC.

In March Motor Trader reported that the Commission was carrying out an anti-subsidy investigation into Chinese battery EVs to determine whether to impose tariffs to protect EU producers.

The probe is due to conclude by November, although the EU could impose provisional duties in July.

An interim decision must be published by early-July and a final decision by November, so this affects cars that are already built for the European market and are in transit as well as the current build plans.

Will Roberts, head of automotive research at Rho Motion, said: “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.”

Rho Motion’s data shows that in 2023 just shy of half a million EVs were sold in the EU which were imported from China making up nearly one-third of the total EVs bought.

IT said of the vehicles imported last year, 79% were from Western brands, predominantly Tesla, but with significant volumes also from manufacturers such as Volvo (Geely-owned) and Dacia.

A further 15% of imports can be attributed to MG which, while a fully Chinese-owned company (SAIC), has brand heritage in the European market. Excluding those mentioned, the remainder made up just over 6% of EV imports into the EU last year.

The UK has also been in the headlines with regard to Tariffs. In March the UK government said it will use trade sanctions if the UK is threatened by a flood of cheap Chinese car imports.

Secretary of State for Transport, Rt Hon Mark Harper MP, attending the SMMT Connect conference, told delegates the UK had very robust measures in place for fair international trade.

Harper said: “We have very robust measures in this country, with a trade remedies regime which deals with not just the car industry but all markets, about making sure we have fair international trade, and that we don’t have dumping or unfair subsidy, the Telegraph reported.

“So, I think we have a good legal structure. That is the structure that will make sure that competition is fair and that there’s a level playing field.”