EU confirms steep tariffs on Chinese electric vehicles, effective immediately

The European Commission has confirmed what seemed to be a predetermined conclusion: steep tariffs will be slapped on China-made battery electric vehicles (BEVs) as of 5 July, a momentous decision poised to redefine relations with Beijing and invite retaliatory measures against European producers.

The step, previewed in early June, is the result of a nine-month investigation that found subsidies being pumped across the entire supply chain of BEVs produced in China, both by domestic and foreign companies. Public money was detected everywhere, officials said, from the mining of raw materials needed to churn out batteries to the shipping services employed to bring the finished products to Europe's shores.

The sheer scale of subsidies allows Chinese producers to offer their BEVs at noticeably lower prices than those assembled in the bloc, where energy and labour costs are much higher. The price gap has triggered a rapid surge in imports of China-made BEVs: from a 3.9% market share in 2020 to 25% at the end of 2023, according to the Commission.

This wave of low-cost imports represents a "threat of economic injury" to the EU industry that could lead to devastating losses and put at risk more than 12 million direct and indirect jobs, the executive warns.

Tariffs are therefore necessary to offset the unfair advantage granted by subsidies.

The decision published on Thursday foresees differentiated duties, calculated according to the parent company, annual turnover and suspected amount of subsidies received. They will come on top of the existing 10% rate.

The introduction of the measures will be, for the time being, provisional. Customs authorities will request bank guarantees, rather than cash, from Chinese exporters, meaning end