The European Commission’s proposal to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China has secured the necessary support from EU member states, marking a significant step towards the conclusion of the Commission’s anti-subsidy investigation.
The decision, which aims to offset the damaging effects of Chinese subsidies and close the price gap between Chinese and EU firms, was backed by a majority of member states. According to several diplomats, ten countries voted in favour, including France, Italy, the Netherlands, Poland, Denmark, Ireland, Bulgaria, Estonia, Lithuania, and Latvia, representing 45.99% of the EU population. Twelve countries abstained, while five—Germany, Hungary, Malta, Slovenia, and Slovakia—voted against, representing 22.65% of the EU population.
The tariffs, which will come into force in November and be collected by customs officials, vary according to the brand and their level of cooperation with the Commission’s investigation. Tesla will face a 7.8% tariff, BYD 17%, Geely 18.8%, SAIC 35.3%, and other cooperative EV producers in China 20.7%. Non-cooperative producers will face a 35.3% tariff. These duties will be added to the existing 10% rate, meaning some Chinese carmakers could face tariffs exceeding 45%.
However, the move has sparked controversy, with Hungarian Prime Minister Viktor Orbán warning that Europe’s tendency towards economic protectionism could destroy the EU’s economy. “What they’re making us do, what the European Union is doing, is an economic cold war,” Orbán told state radio. “This is the worst thing that can happen to Europe. … If this continues, the European economy will die,” he said.
Despite the vote, the EU and China continue to work towards an alternative, WTO-compatible solution that adequately addresses the injurious subsidisation established by the Commission’s investigation. A Commission Implementing Regulation, including the definitive findings in the investigation, will also be published in the Official Journal by 30 October 2024 at the latest.
