EU duty rates on Chinese e-cars slightly revised. Beijing opens a new battlefront on dairy products

The European Commission is paving the way for definitive countervailing duties on imports of battery electric vehicles from China. On Tuesday, August 20th, the EU Executive disclosed to interest parties the draft decision containing an adjusted set of duty rates. The comments obtained by interested parties and the remaining investigative steps led the European Commission to revise downward the provisional measures proposed on July 4th to be applied to involved Chinese companies.

Custom duty rates will drop from the adopted initial 17,4% to 17% for BYD, from 19,9% to 19,3% for Geely, and from 37,6% to 36,3% for SAIC. Other producers in China, which cooperated in the investigation but were not sampled, are now subject to the 21.3% weighted average duty. This rate has been revised upward from the 20,8% initially adopted by the European Commission in its list of provisional measures. A lower rate equal to 36.3% is preferred to the 37.6% initially conceived by the EU Executive.

Tesla will be granted an individual duty rate established at 9%. Several Chinese exporters and certain joint ventures with EU producers that did not yet export at the time of the investigation period can benefit from the lower duty rate foreseen for their related cooperating companies. The European Commission also decided not to retroactively collect countervailing duties.

Interested parties will use the 10-day timeframe to request hearings with the Commission services and provide comments. Based on this feedback, the European Commission will present the final determination to Member States. The final decision will be voted on based on an examination procedure under comitology rules. The European Commission proposal is adopted until a qualified majority against it emerges.

A newly announced Chinese anti-subsidy investigation into the import of dairy products from the European Union is considered linked to the steps the EU Commission is taking against electric battery vehicles imported from Beijing. The file was reported by the Ministry of Commerce in a note released after the final draft of the European Commission’s countervailing duties on imports of e-cars made in China.

The investigation, the Ministry of Commerce reported, started after an explicit request made in late July by the China Dairy Association and the China Dairy Industry Association and will cover imported dairy products, including fresh cheese and curd, blue cheese, and some processed milk and cream, sifting through several subsidies under the EU’s Common Agricultural Policy (CAP). The assessment work is expected to be closed within a year, with a possible extension for a further six months.

Beijing said that the investigation will cover subsidy schemes launched until the end of March 2024 and possible damage to China’s domestic industry between the beginning of 2020 and last March, as well as national subsidy schemes in Ireland, Austria, Belgium, Italy (in particular, subsidies to livestock insurance and dairy logistics), Croatia, Finland, Romania, and the Czech Republic.

The investigation will last one year, with a possible extension of six more months “in special circumstances.”