EU gains member approval for tariffs on Chinese EVs

Today, the European Commission successfully obtained the necessary backing from EU Member States to move forward with the imposition of countervailing duties on imports of battery electric vehicles (BEVs) from China.

This crucial step marks further progress in the Commission’s ongoing anti-subsidy investigation into China’s support for its electric vehicle industry, which has been a source of concern for European automakers and policymakers alike.

In recent years, Chinese electric vehicle manufacturers have gained considerable market share in Europe, benefiting from the EU’s rapid shift towards electric mobility and green technologies. However, the European Commission launched an anti-subsidy investigation after allegations surfaced that China’s EV industry receives significant state support, creating an uneven playing field for European automakers.

These subsidies, critics argue, allow Chinese manufacturers to export BEVs at artificially low prices, undercutting European competitors and threatening the EU’s domestic automotive sector.

The Commission’s investigation, which began in September 2023, sought to assess the validity of these claims. Initial findings pointed to injurious subsidization that distorts the market, prompting the Commission to propose countervailing duties — a form of tariff meant to offset the impact of these subsidies.

With the necessary support from EU Member States now secured, the Commission is poised to implement definitive countervailing duties on Chinese BEVs. The definitive findings in the investigation are expected to be revealed in the Commission’s final report, which must be published in the Official Journal by October 30, 2024, at the latest.

Despite the momentum toward imposing tariffs, the EU and China are simultaneously exploring alternative solutions. Both sides have engaged in intense diplomatic discussions, seeking a resolution that would address the concerns raised by the Commission’s investigation while remaining fully compatible with WTO rules.