EU Rejects China Offer to Avoid EV Tariffs Ahead of Official Visit

A BYD Ocean-M electric car is displayed at the Beijing Auto Show in Beijing on April 25, 2024. Pedro Pardohoto by Pedro/AFP via Getty Images

The European Commission, currently finalizing new tariffs for Chinese electric vehicle imports, said Sept. 12 that it has rejected a minimum price offers by Chinese firms as an alternative to tariffs.

The European Union (EU) launched an investigation into Chinese EV imports last year and found that the state has unfairly subsidized China’s EV industry. As a result, the foreign EVs are not priced according to a competitive market, and allowing imports at prices set by the Chinese manufacturers would hurt the European market, according to the EU, requiring a tariff.

A European Commission spokesperson said the new proposals from Chinese firms would not offset the effect of state subsidies.

“Our review focused on whether the offers would eliminate the injurious effects of subsidies and could be effectively monitored and enforced. The Commission has concluded that none of the offers met these requirements,” a spokesperson said.

The spokesperson said the EU was open to negotiation, so long as the proposals comply with World Trade Organization rules and “fully remedy the injurious effects of subsidies identified.”

On Sept. 19, Chinese Commerce Minister Wang Wentao is set to arrive in Europe to meet EU trade chief Valdis Dombrovskis to try to negotiate on the tariffs.

The current proposal sets tariffs of 9 percent for Tesla, 17 percent for BYD, 19.3 percent for Geely, and 36.3 percent for the state-owned SAIC Group. This is on top of the standard 10 percent duty that the bloc applies to all imported cars.

If the majority of the bloc’s 27 member states support the plan in October’s vote, the rates will become definitive duties by the end of the month. These trade duties typically remain in effect for five years once passed.

The Chinese Communist Party (CCP) has launched seemingly retaliatory investigations in response to the European EV tariffs. In June, Beijing announced an investigation into European pork subsidies a day after the European Commission launched its investigation. Last month, the state announced an investigation into European dairy a day after proposed tariff rates were released.

The United States and Canada have also announced tariffs on Chinese EVs.

Washington is set to increase tariffs on Chinese-made EVs from 25 percent to 100 percent. The move is a precautionary one, as the United States currently imports few Chinese EVs. Canadian Prime Minister Justin Trudeau also announced on Aug. 26 that 100 percent tariffs on Chinese EVs and 25 percent tariffs on Chinese steel and aluminum products would go into effect in October.

Dorothy Li and Reuters contributed to this report.