China Vows to Defend EV-Makers as EU Confirms Additional Import Duties

China has expressed strong disapproval over the European Commission’s decision to implement tariff hikes on all electric vehicles (EVs) imported from China, denouncing it as "unreasonable" and vowed to take "all necessary measures" to protect Chinese companies [para. 1]. The European Commission's announcement on Tuesday revealed an adjusted proposal for additional duties on China-made EVs, resulting from an ongoing investigation that concluded state subsidies were enabling Chinese electric-car makers to underprice their European competitors [para. 2].

In a further escalation of trade tensions, China initiated an anti-subsidy investigation into European Union dairy products the following day. The Ministry of Commerce communicated that the probe was commenced at the behest of Chinese industry groups and would focus on products like fresh and processed cheese [para. 3].

The European Commission decreased the latest EV tariff hikes slightly from the provisional levels: MG-owner SAIC Motor Corp. Ltd. now faces a 36.3% duty, Volvo Car AB parent Geely Automobile Holdings Ltd. a 19.3% duty, and BYD Co. Ltd a 17% duty [para. 4]. Tesla Inc., however, received a comparatively lower tariff of 9%, a relief attributed to fewer subsidies from Beijing for foreign-owned companies [para. 6]. Earlier, Tesla had sought individual assessment from the EU, resulting in officials visiting its plants in China [para. 7].

Companies like Dongfeng Motor Group Co. Ltd. and Nio Inc. that cooperated with the investigation but weren’t specifically surveyed face a 21.3% tariff, while other non-cooperative manufacturers will encounter a 36.3% duty. These new rates will be in addition to the 10% duty already imposed on Chinese exporters [para. 8].

China’s Ministry of Commerce responded through a statement on Tuesday, condemning the European investigation as having a "predetermined conclusion.” They indicated that the government, along with automakers, submitted extensive legal documents and evidential support in various forms to counter the commission’s “unreasonable and non-compliant practices” [para. 10][para. 11]. The ministry accused the EU of basing its latest findings on unilateral facts and called for a rational and pragmatic approach to resolving the issue, urging the EU to prevent further escalation of trade tensions [para. 12].

Chinese companies such as SAIC, Geely, and BYD have yet to make public statements on the revised tariffs. They have until August 30 to comment and request hearings regarding the proposal. Should a qualified majority of member states fail to reject the measures in a binding vote, the European Commission will finalize the regulation by October 30, making the duties effective for five years with the possibility of extension [para. 14].

The China Chamber of Commerce to the EU also communicated its "strong dissatisfaction and firm opposition" in a statement, arguing insufficient evidence of substantial material injury caused by Chinese EVs to the EU market [para. 15]. The commission’s investigation, officially launched in early October, had preliminarily found that China’s battery-EV value chain benefits from unfair subsidies, posing an economic threat to EU BEV producers [para. 17].

Some EU member states, including Germany and Hungary, have resisted the tariffs, but a majority is needed to halt their implementation [para. 18].

Provisional duties, introduced on July 5, have already impacted the market. Registrations of new EVs by Chinese automakers in the EU decreased by 45% from June, with SAIC’s MG brand reporting a 20% sales drop and Geely’s Polestar brand seeing a 42% decline in sales [para. 19][para. 20].

This summary illustrates the evolving trade conflict between China and the EU over EV tariffs, highlighting key developments and the broader implications for both markets.