The European Union imposed a five-year tariff on Chinese electric vehicles on October 30

The European Commission's decision to impose countervailing duties on Chinese electric vehicles for five years has heightened trade tensions between the world's largest exporting economies.

Bloomberg and Reuters reported that according to the announcement issued by the European Commission on Tuesday (October 29), the European Commission concluded its anti-subsidy investigation into Chinese electric vehicles on the 29th, concluding that China's electric vehicle value chain benefited from "unfair subsidies" and caused "threats of economic harm" to EU electric vehicle manufacturers. Decided to impose countervailing duties on electric vehicles imported from China for a period of five years.

The additional tariffs were officially approved and published in the Official Journal of the European Union on Tuesday, meaning they will take effect on Wednesday, October 30.

Byd will be subject to countervailing duties of 17 per cent, Geely will be subject to 18.8 per cent and SAIC will be subject to 35.3 per cent, according to the announcement.

Other Chinese companies that are not sampled but cooperate with the EU investigation will be subject to a 20.7 percent countervailing duty, while other Chinese companies that do not cooperate with the EU investigation will be subject to a 35.3 percent countervailing duty.

The EU will continue to work with China to find alternatives consistent with World Trade Organization (WTO) rules, and is open to separate price commitment negotiations with companies.

Germany supports continued EU negotiations with China while protecting EU industry

After the EU announced an increase in tariffs on Chinese-made electric vehicles, the German Economy Ministry issued a statement saying that Germany supports the EU's continued negotiations with China and hopes to use diplomatic means to ease trade tensions between the two sides while protecting EU industry.

A spokesman for the German Economy Ministry said in a statement that Germany is committed to keeping its markets open and is continuing efforts to reach a negotiated outcome with China.

On October 4, 2023, the European Commission launched a countervailing investigation into electric vehicles imported from China, and imposed temporary countervailing duties on Chinese electric vehicles on July 4 this year. Compared with the provisional countervailing duty rate, the Commission's final countervailing duty rate is slightly adjusted.

In response, China has launched anti-dumping and anti-subsidy investigations into EU brandy, dairy products and pork.

Before the final ruling of the European Commission, Chinese Minister of Commerce Wang Wentao held video talks with the Executive Vice President and Trade Commissioner of the European Commission Dombrovskis on October 25 at the request of the European Union to exchange anti-subsidy cases of electric vehicles in China. Wang Wentao pointed out that all sectors in China and Europe have strong voices and high expectations for the proper handling of the case. Since September 20 this year, China and the EU have held intensive consultations on the price commitment package, and positive progress has been made in some aspects, but there are still major differences on issues concerning the core concerns of the Chinese and EU industries.

Wang Wentao stressed that China will unswervably safeguard the legitimate rights and interests of enterprises, and hopes that China and the EU will continue to push forward the consultation on the basis of the previous stage of consultation, achieve substantive breakthroughs as soon as possible, earnestly respond to the expectations of all sectors in China and the EU, and safeguard the common interests of China-Eu industry and the overall situation of China-Eu mutually beneficial economic and trade cooperation.