The EU has set a plan to impose a maximum tariff rate of 46.3 percent on electric vehicles manufactured in China from the end of October this year. The tariff rate for Tesla vehicles manufactured in China is expected to be 19 percent.
The European Commission announced on the 20th (local time) that it has notified stakeholders of a draft final tariff on anti-subsidy investigations that have been conducted on Chinese electric vehicles. The draft will be implemented for five years from October 30 after 10 days of collecting opinions and voting from 27 member states.
The EU has announced that it will increase the tariff rate on Chinese electric vehicles, excluding Tesla, to 27.0 to 46.3%. The figure is an increase of 27.0 to 36.3 percentage points depending on the company from the current uniformly applied tariff rate of 10%. The increase in tariffs by each company is determined by the degree of cooperation in anti-subsidiary investigation. Specifically, it will be applied as BYD 27.0%, Gely 29.3%, and SAIC 46.3%.
However, tariffs on Tesla electric vehicles manufactured at factories in China will be limited to 19 percent. An EU official said that Tesla’s Chinese factories are subsidized less than other Chinese electric carmakers. However, European carmakers who jointly built factories in China, including Volkswagen and BMW, are expected to be subject to an additional tariff rate of 21.3 percentage points.
The Commission said on the same day that it would not collect provisional tariffs, which it had announced would apply temporarily from the 5th of last month. Earlier, the EU had announced that it would impose temporary additional tariffs of 17.4 to 37.6 percentage points by November before the official tariff rate hike is finalized. In other words, the government introduced a measure to “define the rules after imposing tariffs” due to the delay in the process of investigating anti-subsidies and finalizing tariff rates. However, it is interpreted that the government eventually gave up collecting provisional tariffs due to the burden of legal disputes over retroactive application.
The Chinese industry immediately protested the announcement of the draft tariff. “The executive duty is an unfair trade measure to hinder the free trade of electric vehicles,” the Chinese Chamber of Commerce and Industry in the EU said in a statement.
Earlier, the EU announced the imposition of a “bomb tariff” from October last year, saying that Chinese-made electric vehicles are being distorted by pouring out a low-cost offensive based on excessive Chinese government subsidies. An EU official said on the draft of the final tariff, “We are still in talks with China,” hinting that the final tax rate could be readjusted.
EJ SONG
US ASIA JOURNAL
