EU Imposes Provisional Duties on Chinese EVs, Risking Beijing Retaliation
The European Commission will impose provisional duties on Chinese-made electric vehicles (EVs) imported into the European Union, with rates ranging from 17.4% to 37.6%. These duties, on top of the standard 10% tariff for car imports, come in response to an anti-subsidy investigation aimed at preventing injury to EU industry.
Provisional duties can last up to nine months, after which the Commission will decide on final duties. Interested parties, including China and EV producers, have until July 18 to comment on the ongoing investigation. The final report is expected to confirm the provisional findings, with possible adjustments based on feedback received.
Tesla has requested a separate duty rate, aiming for a lower rate than the 20.8% for cooperative companies. Exporters may also commit to selling at or above a minimum price as an alternative to duties. The Commission has full power to impose duties at the provisional stage, but must consult with EU members before proposing definitive duties, which typically last five years.
After the investigation, companies not in the sample group can request an "accelerated review" for individual duty rates. The Commission can also conduct an "interim review" if measures are deemed insufficient. Companies can challenge the measures in court, and China can take the EU to the World Trade Organization.
In summary, the EU's decision to impose provisional duties on Chinese EVs could have significant implications for the global electric vehicle market. It is essential for investors to monitor developments in this trade case, as it may impact the financial performance of EV manufacturers and related industries.