EU's Tariff Turmoil: Navigating the Electric Vehicle Clash with China

The European Union is increasing tariffs on Chinese-built electric vehicles, with rates up to 45.3%. This move follows investigations into alleged unfair subsidies. The decision has sparked tension between the EU and China, with counter-probes and economic disputes on the horizon.

The European Union has raised tariffs on Chinese-manufactured electric vehicles to as high as 45.3%, concluding a significant investigation that has split European opinion and triggered Chinese retaliation. The decision, taken a year after initiating the anti-subsidy inquiry, introduces additional tariffs from 7.8% for Tesla to 35.3% for China's SAIC, in addition to the EU's standard 10% import duty.

The formal approval of these tariffs, published in the EU's Official Journal, means they become effective immediately. The Commission, responsible for EU trade policy, claims these measures are necessary to combat unfair subsidies such as favorable financing, grants, and materials priced below market levels.

Beijing, labeling the tariffs as protectionist, has reacted by launching its own investigations into European imports, raising concerns about further strain on EU-China relations. With Chinese EVs priced about 20% less than European models, their market share in the EU has grown significantly, prompting European automakers to face fierce competition.

(With inputs from agencies.)