Escalation of trade war: EU to impose 38% tariff on electric vehicles from China
Starting from next month, the European Union will impose additional tariffs on electric vehicles from China at a rate of 38.1%, leading to an escalation of the global trade war and increased sales costs for companies from Chinese BYD Co. to Tesla Inc.
Source: Bloomberg
The EU officially notified carmakers, including BYD Co., Geely Automotive Holdings Ltd., and SAIC Motor Corp Ltd., about tariffs that are set to be imposed around 4 July. Chinese electric vehicle manufacturers are increasingly pushing into Europe amid internal price wars and years of leadership in this technology.
Individual tariffs on BYD vehicles will be 17.4%, Geely 20%, and SAIC 38.1%, the commission said on Wednesday. China has hinted at retaliatory action, threatening measures on agriculture, aviation, and large-engine automobiles. Beijing has already initiated investigations into some types of European alcohol, with results expected soon.
Background:
- The European Commission plans to announce temporary tariffs on Chinese electric vehicle manufacturers that could reach around 25%. Plans by Chinese carmakers to invest in Europe will not be halted by the EU's anti-subsidy investigation into Chinese-origin electric vehicles.
- Volvo, headquartered in Sweden and majority-owned by Chinese carmaker Geely, is considering plans to relocate some car production from China to Belgium.
- China is prepared to impose tariffs of up to 25% on imported automobiles from EU and US carmakers amidst escalating trade tensions.
- US President Joe Biden is increasing tariff rates on imports of Chinese goods, including semiconductors, batteries, solar panels, and electric vehicles.
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