The European Union delivers the final blow to Chinese electric cars with tariffs starting in July

If just a few days ago it was the United States announcing the imposition of tariffs on Chinese products such as electric cars, solar panels and microchips, now it is the European Union that delivers a direct blow to Chinese electric cars with the announcement of tariffs that will come into force practically immediately, specifically from 4 July onwards.

This decision taken by the European Union stems from the investigation it has carried out, which concludes that Chinese electric car manufacturers benefit from subsidies that the Investigation Commission considers unfair, which poses a serious threat to European electric vehicle manufacturers.

The result of this investigation, which began to take shape at the end of last year, has taken a little time but has not been long in coming to be put into action, although the Investigation Commission has previously taken into account the possible consequences and the impact these measures will have on the importers, users and consumers of the European Union itself.

It should be noted that some brands, though not all, of Chinese electric car manufacturers have collaborated in this investigation and this has been taken into account when deciding how the tariffs will be applied, which will first be discussed with the Chinese authorities and, should they not offer a solution that suits both parties, these tariffs or “countervailing duties” will be confirmed from 4 July onwards, to then become a definitive measure that must be applied within a maximum of 4 months.

The tariffs that the European Union proposes from the outset affect the three major Chinese electric vehicle manufacturers and would be as follows:

• BYD 17.4%
• Geely 20%
• SAIC 38.1%

In addition, other electric vehicle producers that collaborated with the European Union in the investigation, but were not included in the sample, will be subject to an average tariff of 21%. The remaining Chinese manufacturers that refused to take part in the investigation will be subject to a maximum tariff of 38.1%. The European Union’s statement also mentions that companies such as Tesla, which also produce in China, may receive an tariff that will be calculated individually when the definitive phase is reached.

This decision has come despite the strong opposition of countries such as Germany, Sweden or Hungary, who rightly point out that this could lead to a harsh trade war with a giant in this respect such as China. Obviously this will have consequences for the European Union and its various member states, the extent of which remains to be seen, and it is also not stated what will happen to European brands that manufacture their cars in China: will they also face tariffs? will it mean the reopening of factories in Europe? We do not yet know, but brands such as Volvo, owned precisely by Geely, have already made their move by announcing the production of their electric vehicles in Belgium.