Chinese Electric Cars to Become More Expensive in Europe as Import Duties Take Effect

The US government has finally decided not to impose import duties on Chinese electric cars, and the EU is following suit. From July 4th, electric cars from Chinese brands are expected to become significantly more expensive. If no compromise is reached with Beijing by today, Thursday, the EU Commission will increase tariffs to protect its car industry from competition from the Far East. German car manufacturers are concerned about the potential consequences for their business model and are still hoping for a negotiated solution.

The EU Commission is set to publish details of the entry into force of these tariffs on Thursday, with collection starting at midnight on July 5th. By November, EU states must decide whether to introduce tariffs in the long term. In case of a decision to do so, provisional tariffs would be retroactively imposed in certain cases.

The Chinese state has been subsidizing domestic electric car manufacturers for years, allowing them to offer their cars in Europe at a much lower price than their European competitors. After months of investigation, the EU Commission has determined that these subsidies distort the market and pose a threat to EU industry, justifying the imposition of import duties to ensure fair competition.

Germany is hoping for a compromise as the German Association of the Automotive Industry warns of potential repercussions for the domestic economy. The association is concerned about the damage that could be caused by potential countermeasures from Beijing. China is a significant car market and one of the main export markets for German cars. The introduction of import duties from China could have a substantial impact on the industry.

The EU Commission has determined specific tariffs for different brands, with those cooperating in the investigation facing lower tariffs compared to those that did not cooperate. These temporary tariffs will be in place until November at which point a decision will be made on whether to maintain them in the long term. The decision will require a qualified majority of EU member states.

The possibility of retaliatory measures from Beijing looms large, such as restrictions on pork imports or punitive tariffs on EU products. German car companies are particularly concerned about a potential escalation of tensions.

In addition to this ongoing investigation into solar cells from China receiving excessive subsidies which could lead to further punitive tariffs.

Overall, this decision marks another step towards ensuring fair competition between countries and protecting domestic industries while maintaining an open global marketplace for consumers and businesses alike.