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EU announces tariff hike on Chinese EVs amid ongoing anti-subsidy investigation

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The European Union is taking steps to support its domestic automakers who are struggling with competition from China’s low-cost electric vehicles (EVs). In an effort to help the continent’s car companies compete, the EU has announced tariff increases of up to 38% on imported Chinese EVs.

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“The influx of subsidized Chinese imports at artificially low prices therefore presents a threat of clearly foreseeable and imminent injury to EU industry,” the European Commission said in a statement.

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This tariff hike follows the launch of an ongoing anti-subsidy investigation by the European Commission into Chinese EV prices.

Investigators aim to determine whether the prices have been artificially lowered due to financial assistance from Beijing. Companies cooperating with the probe will face a 21% tariff, while those that do not comply will be subjected to the full 38% duty.

The new tariffs will impose billions of dollars in additional costs on Chinese car manufacturers. Western automakers — such as Tesla and BMW, which produce EVs in China — will also be affected by these increased tariffs.

Beijing has criticized the EU’s decision, warning that it could harm relations between Europe and China and threaten the stability of the global automotive supply chain. China’s Ministry of Commerce accused the bloc of “creating and escalating trade tensions” with this move.

Following the tariff announcement, shares of some leading European car manufacturers fell, reflecting fears of potential retaliatory actions from China.

Despite the EU’s measures, car companies in China remain optimistic. The Chinese Passenger Car Association stated that the tariff hike was anticipated and also predicted it would not significantly impact their automakers. The industry group still foresees considerable growth potential for Chinese-made EVs in the European market.

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[JACK AYLMER]

THE EUROPEAN UNION IS TAKING ACTION.

IT’S A RESPONSE TO AUTOMAKERS ON THE CONTINENT – STRUGGLING TO COMPETE WITH CHINA’S LOW COST ELECTRIC VEHICLES. 

IMPOSING TARIFF INCREASES OF UP TO 38 PERCENT ON IMPORTS OF THESE CARS.

PRIOR TO THIS RATE HIKE, THE EUROPEAN COMMISSION ALREADY LAUNCHED AN ANTI-SUBSIDY INVESTIGATION INTO CHINESE EVS- IT’S STILL ONGOING.

INVESTIGATORS ARE TRYING TO DETERMINE WHETHER CHINESE E-V PRICES HAD BEEN KEPT DOWN ARTIFICIALLY AS A RESULT OF BEIJING’S ASSISTANCE.

COMPANIES THAT COMPLY WITH THE PROBE – THEY’LL ONLY BE HIT WITH A 21-PERCENT TARIFF RATE.

BUT THOSE THAT DON’T ARE GOING TO BE HIT WITH THE FULL 38 PERCENT DUTY.

THIS WILL MEAN BILLIONS OF DOLLARS IN EXTRA COSTS FOR CHINESE CAR COMPANIES-

AND EVEN SOME WESTERN AUTOMAKERS THAT PRODUCE THEIR EVS IN CHINA-

INCLUDING TESLA AND BMW.

BEIJING WARNED THE TARIFF HIKE WOULD DAMAGE RELATIONS BETWEEN EUROPE AND CHINA-

ADDING THIS MOVE COULD THREATEN THE GLOBAL AUTOMOTIVE SUPPLY CHAIN’S STABILITY.

SOME OF EUROPE’S TOP CAR MAKERS SAW THEIR SHARES FALL AFTER THE NEW TARIFFS WERE ANNOUNCED OVER FEARS OF CCP RETALIATION. 

BUT WHILE THE EUROPEAN AUTO INDUSTRY BRACES FOR FALLOUT, CHINESE CAR COMPANIES DON’T EXPECT A LOT TO CHANGE FOR THEM.

AN INDUSTRY GROUP SAYING THE MOVE WAS EXPECTED AND WON’T HAVE MUCH IMPACT ON THEIR AUTOMAKERS-

EVEN PREDICTING THERE WILL STILL BE HUGE POTENTIAL FOR CHINESE-MADE EV GROWTH THROUGHOUT EUROPE IN THE FUTURE.

THE GLOBAL TRADE WAR WITH CHINA OVER ELECTRIC VEHICLES CONTINUES WITH THIS LATEST MOVE. FOR MORE UPDATES ON HOW THE EV TRANSITION IS PLAYING OUT AROUND THE WORLD, DOWNLOAD THE STRAIGHT ARROW NEWS APP AND SIGN UP FOR ALERTS FROM ME- JACK AYLMER- TO STAY PLUGGED IN.