European Union And China Open To EV Tariff Alternatives

Back in September, new, higher tariffs on certain items from China took effect in the U.S., imposing a 100 percent duty on Chinese EVs, 50 percent on solar cells, plus 25 percent on steel, aluminum, EV batteries, and key minerals, while others were delayed until future years. Citing similar concerns over unfair competitive practices and potential national security issues, Canada also announced that it will follow that lead and impose tariffs of its own, which is something the European Union has also been mulling for some time now. However, the EU has also made it clear that it’s open to alternative measures, and is once again keeping that idea afloat.

Though the European Union has made it clear that it’s willing to impose tariffs on Chinese imports, it has now agreed to continue talking with China regarding potential alternatives, according to a new report from Reuters. The EU was previously set to impose a 35.3 percent tariff on Chinese EVs as soon as next week, but now, it plans to continue to discuss the matter with Chinese officials. According to the EU, both sides are exploring potential minimum price commitments from Chinese producers or investments in Europe as an alternative to those tariffs.

Thus far, the European Union has held eight sets of technical discussions with China regarding this matter, noting that there are still “significant remaining gaps” that need to be filled. Regardless, it agreed to keep communications open, and Chinese Minister of Commerce Wang Wentao added that Beijing “welcomed the EU team to come to China as soon as possible,” singling out price commitments as a potential solution.

While several Chinese EVs are already on sale in Europe – and these talks may very well lead to a productive outcome for Beijing – it still has other potential legal ramifications to consider in the U.S. There, the Commerce Department has proposed a rule that would effectively ban all Chinese software and hardware from being used in vehicles on U.S. roads, which would include models like the Lincoln Nautilus, which is built in China and exported to the U.S.