As expected, many electric car manufacturers in China reacted quickly to the new EU rules, asking their governments to mirror the tariffs applied to imported European cars.

Trade war escalates

As you may remember, following the anti-subsidy investigation that started last autumn, the EU Commission determined that Chinese-made electric cars had an unfair advantage in European markets. But even before the Commission shared the results of its investigation, the EU had threatened to increase tariffs on Chinese imports, following the example of the United States, which recently increased tariffs to 100%. While awaiting the results of the investigation, China has threatened to retaliate with its own tariffs against European automakers and has promised to increase tariffs on gasoline cars imported into China by up to 25%.

Despite the uncertain situation in both markets, Chinese electric vehicle manufacturers express determination to continue expanding into European markets. However, at the domestic level, the same automakers are demanding that the Chinese government increase customs duties on EU automakers. Local companies have called on Beijing to increase customs duties on internal combustion vehicles imported from Europe, according to a report in China’s state-run Global Times newspaper.

The report stated that the Chinese Ministry of Commerce held a meeting with major automobile companies such as SAIC, BYD, BMW, Volkswagen and Porsche in Beijing on Tuesday. During the meeting, Chinese automakers called on their governments to “take decisive countermeasures.” According to the information obtained, representatives of Mercedes-Benz, Stellantis and Renault were also present at the meeting. Apparently this meeting An attempt has been made to unite EU carmakers to help put pressure on the European Commission in Brussels for the purpose of at least relaxing tariffs, if not eliminating them completely.

EU tariffs on Chinese-made electric cars will come into force on July 4, 2024 unless repealed before implementation, so the parties still have some time to find a solution.