Long viewed by many as potential national security threats and unfair in regard to business practices, Chinese EVs and other associated raw materials have recently been the subject of not only increased tariffs in more than one country, but also, potential outright bans in some cases. However, even after the U.S. and Canada have imposed new Chinese EV tariffs as of late, the European Union has maintained that it wants to explore potential alternatives to that action, though it has long been ready to install Chinese EV tariffs of its own. Now, that’s precisely what has happened.
According to Bloomberg, the EU will indeed move forward with plans to impose higher Chinese EV tariffs that will likely take effect later this week. However, those tariffs will look a bit different than the ones already enforced in the U.S., as they’ll vary based on manufacturer. On top of the existing 10 percent tariff, Tesla is facing a 7.8 percent increase, followed by BYD (17 percent), Geely, (18.8 percent), SAIC (35.3 percent), and 20.7 percent for “other cooperating companies.”
Supporters of Chinese EV tariffs point to fears that the country is on the cusp of dominating global auto sales as BYD, for example, has skyrocketed into the top 10 best-selling automakers on the planet in just a few short years. However, a number of European automakers have actually lobbied against the tariffs – including Mercedes-Benz and BMW – noting the the move could hurt sales of those models in China during a period of time when most are already struggling financially.
Meanwhile, EU and Chinese officials will continue to hold discussions as both seek alternative solutions to these fresh tariffs, though little progress has reportedly been made thus far. Both sides have discussed price undertakings as a potential solution, which is a way to control both pricing and exports. The EU is also reportedly seeking more oversight in terms of compliance and alignment with World Trade Organization rules, but thus far, China has not presented a proposal that meets these requirements. Additionally, Chinese automakers that shift production to Europe may wind up paying no tariffs if an agreement can be reached.
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