EU member states are voting today on imposing up to 45% tariffs on electric vehicles (EVs) manufactured in China for the next five years. These tariffs will be added to the existing 10% tariffs on all car imports outside the EU, ranging from 7.8% for Chinese-made Teslas to 35.3% for vehicles from China’s SAIC.
The European Commission investigated subsidies provided by the Chinese government to EV manufacturers, concluding that these subsidies lead to unfair competition in the global market. Chinese EV companies have maintained low production costs, not only through state subsidies but also due to factors like low labor costs and significant domestic competition.
Germany is expected to vote against the measure, as China accounts for nearly one-third of German car manufacturers’ sales.
The European Commission proposed the measure to level the playing field for European car manufacturers rather than to “close the EU market to Chinese imports,” as reported by the New York Times. This differs from the approach taken by the United States and Canada, which have imposed 100% tariffs on Chinese EVs.
For the measure to pass, it requires approval from at least 15 out of 27 member states, representing at least 65% of the EU population. Greece, France, Poland, and Italy are expected to support it, while Germany and Spain are expected to oppose it. If approved, China will likely respond with reciprocal tariffs on EU products, as it has already begun investigating imports of cognac, dairy, and pork from the EU. China is the EU’s third-largest trading partner, following the United States and the United Kingdom.
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