Chinese EV stocks surge after EU slaps up to 38% additional import tariffs
Which Chinese EV manufacturer received the highest tariff rate from the EU, and what reasons were given for this specific rate?
Chinese EV manufacturer SAIC received the highest tariff rate from the EU, with additional duties of 38.1%. The reasons for this specific rate were not explicitly mentioned in the provided information. However, it can be inferred that the EU's decision to impose higher tariffs on SAIC could be related to the company's limited footprint in Europe and the fact that it has yet to establish a production facility on the continent. In comparison, other Chinese EV companies, such as BYD and Geely, have made significant investments in Europe, which might have influenced the EU's decision on the tariff rates.
What specific tariffs has the EU imposed on Chinese electric vehicle (EV) manufacturers, and how do these compare to previous tariff rates?
The European Union has imposed additional tariffs on Chinese electric vehicle (EV) manufacturers, ranging from 17.4% to 38.1%. These tariffs are on top of the standard 10% duty already imposed on imported EVs. The specific tariffs for the EV manufacturers are as follows:
- BYD: Additional tariffs of 17.4%
- Geely: Additional duties of 20%
- SAIC: Additional duties of 38.1%
These tariffs are the result of the EU's investigation into unfair subsidization of Chinese EV makers, which it concluded was causing economic injury to the EU's EV industry. The additional duties are currently provisional and will be introduced from July 4 if discussions with Chinese authorities do not result in a resolution.
Compared to previous tariff rates, these additional duties represent a significant increase. Prior to this decision, Chinese EV imports were subject to the standard 10% duty. The new tariffs show a considerable escalation in the EU's efforts to protect its domestic EV industry from the growing competition of Chinese EV manufacturers.
How does the EU's tariff increase on Chinese EVs compare to the recent changes in U.S. tariffs on the same industry?
The European Union's recent tariff increase on Chinese electric vehicles (EVs) is comparatively modest when compared to the recent changes in U.S. tariffs on the same industry. The EU has imposed additional tariffs ranging from 17.4% to 38.1% on Chinese EVs, depending on the manufacturer. This is on top of the standard 10% duty already imposed on imported EVs. In contrast, the U.S. has imposed 100% tariffs on Chinese EVs, increased from 25% last month4.
The EU's decision to increase tariffs on Chinese EVs came after an investigation concluded that Chinese EV makers benefit from "unfair subsidization," which poses a "threat of economic injury" to the EU's EV industry. The additional duties are currently provisional and will be introduced from July 4 if discussions with Chinese authorities do not result in a resolution. Definitive measures will be placed within four months of the imposition of provisional duties.
In response to the provisional duties, China said the move was "blatant protectionism that will create and escalate trade frictions." The Ministry of Commerce added that it was "deeply concerned and strongly dissatisfied" with the development, as it "disrupts and distorts" the global EV industry.
While the EU's tariff increase is less aggressive than the U.S., it still has significant implications for the EV sector and could potentially impact China's ongoing recovery in the industry. However, setting up local factories in Europe could be the ultimate solution for China's original equipment manufacturers in the long run, as they seek overseas expansion to better fit into the global auto market.