EU Imposes Provisional Tariffs on Chinese-Made Electric Vehicles, SAIC Group Faces Highest Rate (AI Translation)

欧盟对中国产电动汽车加征临时关税 上汽集团税率最高

The European Union (EU) plans to impose provisional countervailing duties on pure electric vehicles (EVs) imported from China starting July 4, a move announced by the European Commission on June 12 [para. 1]. The EU conducted a months-long investigation on three Chinese companies: SAIC Motor, Geely Automobile, and BYD Company, subjecting them to additional tariff rates of 38.1%, 20%, and 17.4%, respectively [para. 2][para. 3]. For other cooperating companies, a unified weighted average tariff of 21% will be imposed, while non-cooperating firms face a 38.1% tariff [para. 3]. If no agreement is reached with the Chinese government, these tariffs will be implemented as scheduled [para. 4].

Currently, the EU’s regular tariff rate for passenger cars is 10%, meaning non-cooperating companies like SAIC could face an increased rate of 48.1% [para. 5]. The European Commission is also taking into account multinational enterprises like BMW, Tesla, and Renault, which may be subject to individually calculated tariffs [para. 6]. An anonymous industry insider pointed out that SAIC’s high tariff suggests non-cooperation with the EU investigation, possibly due to sensitivity around commercial secrets [para. 7]. In 2023, SAIC Motor exported 243,000 vehicles to Europe [para. 8].

SAIC Motor issued a statement on June 13 claiming it relies on technological innovation and is in the process of building a factory in Europe [para. 9][para. 10]. In contrast, China’s Ministry of Commerce criticized the EU for ignoring World Trade Organization rules and expressed strong dissatisfaction [para. 11][para. 12].

The European Commission initiated an anti-subsidy investigation into Chinese electric vehicles in October 2023, which could formally conclude within 13 months [para. 13]. The EU argues that Chinese EVs benefit from government subsidies, leading to market disruptions in Europe [para. 14]. Within the investigation window, the EU has the authority to impose preliminary relief measures, including temporary tariffs [para. 14]. According to a senior engineer, Liu Yan, from the China Automotive Strategy and Policy Research Center, true trade figures suggest that the EU still holds a trade surplus with China in the automotive sector [para. 16].

The implementation of additional temporary tariffs is expected to significantly impact Chinese EV exports to Europe [para. 18]. Projections indicate a potential 30% decrease in export volumes if the 21% tariff is enacted [para. 19]. A German research institute estimated that a 20% countervailing duty could decrease Chinese EV exports to Europe by approximately 125,000 units annually [para. 21]. This scenario would favor local EU car manufacturers but potentially increase consumer prices [para. 22].

Key players in the industry, including BMW Chairman Oliver Zipse, have voiced opposition to these tariffs, arguing they could stifle competition and adversely affect Europe’s automotive industry [para. 25][para. 26]. China has hinted at possible retaliatory measures, although specific actions remain undetermined [para. 28]. Chinese officials, like the Minister of Commerce Wang Wentao, have engaged in diplomatic efforts to prevent the matter from escalating into a trade war [para. 31].

Despite the challenges, Chinese automakers are pursuing local production strategies in Europe, evidenced by BYD's factory in Hungary and Chery’s joint venture in Spain [para. 32]. Establishing local factories aims to mitigate the impact of tariffs and support long-term growth in the European market [para. 34][para. 35]. However, companies like Chery will need time to adapt to local labor laws and higher production costs in Europe [para. 37][para. 38].

Overall, while the EU’s proposed tariffs could hinder Chinese EV exports, Chinese automakers are exploring local production to maintain their presence in the European market [para. 39][para. 40]. Despite the tension, the automotive trade between China and the EU continues to evolve, with both sides cautiously navigating economic and trade policies [para. 42].