Brussels. The European Union is imposing tariffs on imports of electric vehicles from China from Wednesday after negotiations between Brussels and Beijing failed to find an amicable solution to their trade dispute.

Electric vehicles have become a major flashpoint in a broader trade dispute over the influence of Chinese government subsidies on European markets and Beijing’s growing exports of green technology to the bloc.

“By adopting these proportionate and targeted measures after a rigorous investigation, we are defending fair market practices and the European industrial base,” European Commission Executive Vice-President Valdis Dombrovskis said on Tuesday.

“At the same time, we remain open to a possible alternative solution which would be effective in resolving the problems identified and compatible (with the World Trade Organization),” he added. The rights would remain in effect for five years unless an amicable solution is found.

According to the commission, which handles trade disputes on behalf of the 27 EU member countries, sales of electric cars made in China increased from 3.9% of the electric vehicle market in 2020 to 25% in September 2023, in part by unfairly undercutting the prices of European industry. .

Tariffs imposed on Chinese manufacturers will rise to 17 percent on cars made by BYD, 18.8 percent on those of Geely and 35.3 percent on vehicles exported by the Chinese state-owned company SAIC. Geely owns brands such as Polestar and Sweden’s Volvo, while SAIC owns Britain’s MG, one of Europe’s best-selling electric vehicle brands.

Other electric vehicle makers in China, including Western companies such as Volkswagen and BMW, would face tariffs of 20.7%. The commission has an “individually calculated” rate for Tesla of 7.8 percent.

The EU’s retaliatory measures have been opposed by Germany, which has Europe’s largest economy and is home to major automakers.

The president of the German automobile industry association, VDA, said that the imposition of tariffs constitutes “a setback for global free trade and thus for prosperity, job preservation and growth of the economy.” ‘Europe’. Hildegard Müller said the move increases the risk of a large-scale trade conflict.

“The industry is not naive about China, but the challenges must be resolved through dialogue,” Müller said in a statement.

The measures were published in the EU’s Official Journal on Tuesday evening, meaning the duties will come into force at midnight, EU spokeswoman Arianna Podesta said.

The Commission says China has increased its market share in the EU through subsidies along the production chain. These ranged from cheap land for factories provided by local governments, to discounted supplies of lithium and batteries from state-owned companies, to tax breaks and easy financing from government-controlled banks. State.

The rapid growth of China’s market share has raised fears within the EU that Chinese cars could ultimately threaten the EU’s ability to produce its own green technology to combat climate change. Business groups and unions also fear that the jobs of 2.5 million auto industry workers are at risk, as well as those of an additional 10.3 million people whose employment indirectly depends on the production of electric vehicles.

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