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EU member states have agreed to impose tariffs of up to 45 per cent on imports of Chinese electric vehicles, escalating tensions in the ongoing trade dispute between the economic superpowers.
The European Commission’s proposal to hit Chinese imports with anti-subsidy tariffs was supported by a majority of members, despite opposition from Germany and Hungary. This decision follows a thorough investigation into the electric vehicle market, where subsidies to Chinese carmakers and suppliers were found.
The EU tariffs will be in effect for up to five years and will vary from 7.8 per cent for Tesla to 35.3 per cent for SAIC, the owner of the MG brand. This move comes as Chinese companies expand aggressively in Europe, posing challenges to domestic carmakers.
China had already threatened retaliatory tariffs on EU brandy imports and initiated investigations into pork and dairy products. The vote on the tariffs highlighted divisions within the EU, with some member states voting against and others abstaining.
German carmakers, heavily reliant on the Chinese market, have voiced concerns over the impact of tariffs on their sales and profits. The commission has expressed a commitment to finding a WTO-compatible solution to address the issue of subsidization.
Chinese EV and battery makers have made significant investments in establishing manufacturing facilities in the EU, raising concerns over protectionism and trade tensions. The Chinese commerce ministry has criticized the tariffs as unfair and urged negotiations to resolve trade disputes.
Additional reporting by Guy Chazan in Berlin and Henry Foy in Brussels