EU says “Yes” to tariffs on Chinese EVs
On Friday, the EU voted to move forward with tariffs of up to 35.3% on Chinese electric vehicle (EV) imports – on top of the existing 10% duty.
- The tariffs will be in force for five years.
According to Reuters, 10 member countries – including France and Italy – voted in favor of the tariffs, while five – including Germany and Hungary – opposed them, and 12 abstained.
Later that day, China’s commerce ministry (MofCom) condemned the tariffs as “unfair, non-compliant, and unreasonable protectionist actions” (Yicai 1).
- On Tuesday, MofCom announced China will impose temporary anti-dumping measures on EU brandy from October 11.
- It also indicated that EU pork and large-engine vehicles are in the firing line (Reuters 1).
The EV tariffs aren't a done deal yet: The European Commission has until October 31 to implement them.
- However, it said the EU and China will “work hard to explore an alternative solution,” a sentiment China echoed (BBC, Yicai 1).
Some context: China has employed a carrot-stick strategy to influence the EU’s EV tariffs by:
- Offering economic incentives, like increased investments and market access to countries such as Spain and Hungary
- Launching probes into EU industries, like dairy, pork, and brandy, signaling the potential for broader economic retaliation
Get smart: Despite losing the vote, the large number of abstentions represents a partial win for China.
- Beijing has successfully deepened divisions among EU member countries, increasing internal pressure in the EU to strike a still-unlikely compromise.
The bigger picture: Beijing's EU strategy will remain focused on strengthening bilateral economic relations with individual EU countries, paired with the threat of retaliation, to weaken the EU’s collective stance on future China-related "derisking" policies.