New EU duties on Chinese e-cars set to enter into force after Member States’ endorsement

The European Commission’s proposal to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China has obtained the necessary support from EU Member States to adopt tariffs. Among the 27 national experts who voted on imposing additional customs duties, up 35,3%, 10 voted in favor, five were against, and twelve abstained. No qualified majority rejected the proposal of the Commission, which received the green light to adopt an implementing regulation, including the definitive findings to be published in the Official Journal by October 30th at the latest.

“The purpose of this investigation has been to establish or reestablish a level playing field so that the goals pertaining to electric vehicles and the EU ‘green goals’ can be achieved in a fair way”, a European Commission spokesperson reassured journalists after the vote. “We want to remove the injurious subsidization our painstakingly detailed WTO-compatible and thorough investigation identified”, the EU Commission official further stressed.

According to the EU executive the result of the Trade Defence Instruments Committee‘s vote endorsed the new set of additional custom duties and the Commission strategy to find “a fully WTO-compatible solution which is also adequate in addressing the injurious subsidization assessed by the Commission, but also monitorable and forcible”, the spokes added.

“At this time we believe it is necessary to keep the negotiations open and explore all avenues for a compromise solution”, Spanish Minister for Economy, Carlos Cuerpo, stated in a letter to EU Commission Vice-President Valdis Dombrovskis before the vote.According to diplomatic sources, Spain was one of the countries who abstained, along with many other Members such as Finland and Austria.

“Today’s decision means that the negotiations will continue and that the tariffs can be suspended if an agreement is reached,” the Austrian Trade Ministry stated optimistically. “As an export-oriented country with an export quota of over 60%, Austria ranks eighth worldwide in terms of per capita exports: it is, therefore, essential to dismantle trade barriers and minimize conflict scenarios as far as possible”, the statement reads.

Many EU Member States fear the retaliations that Beijing heralded for the agri-food sector EU imports.

EU capitals will be consulted if Brussels enters into any undertakings with Chinese counterparts, whether they be exporters, producers, the government, or the Chinese Chamber of Commerce.
The EU Commission also proposed to downsize the definitive measures with an exception for BYD, whose tariff at 17% remained unchanged. Custom duties for Geely vehicles will be lowered from 19.3% to 18.8%. SAIC and other non-cooperating companies will be imposed an additional 35.3% tariff instead of the most recently proposed 36.6%. Tesla would be less burdened with a 7.8%, a lower percentage than the 9%. Other cooperating companies will have to pay an additional 20,7% duties, which is lower than the 21,3% recently proposed.

A European official dealing with technicalities told journalists that provisional duties until the implementation regulation’s entry into force on October the 31st have been collected as a bank guarantees. “But once the definitive regulation is published and the definitive measures are in force, the provisional duties the bank guarantees will be released, and only definitive duties will be collected as cash collection of duties like in any other case”, she said by answering the journalists.

Germany, Hungary, Malta, Slovenia, and Slovakia voted against the European Commission’s proposals.

“Free and fair trade is essential for ensuring a level playing field for all competitors, but it is only one aspect of global competitiveness”, the European Automobile Manufacturers’ Association (ACEA) reads. The Association, who represents 15 major Europe-based car, van, truck and bus makers asks for a comprehensive industrial strategy mentioning the Draghi report. “This involves securing access to critical materials and affordable energy, establishing a consistent regulatory framework, expanding charging and hydrogen refilling infrastructure, providing market incentives, and addressing various other key factors”, ACEA stated.