In July, the European Commission introduced punitive tariffs on Chinese electric cars. These will now continue for the longer term. Imported electric vehicles are expected to remain more expensive until 2029. This was decided by the majority of European states.
Chinese and German carmakers lobbied against the decision. But without success: the majority of EU countries spoke out today, Friday, in favor of further punitive taxes. The need arises from the Chinese government’s enormous subsidies for electric cars. This means that they can be offered extremely cheaply and can sometimes disrupt competition in Europe. However, the tariffs introduced in July have already had an effect: electric cars imported from China (including those from brands such as VW or Volvo) have now become up to 40 percent more expensive.
The new rates should be introduced from November. An agreement with the Chinese government could be reached in the meantime, but that is unlikely.
Customs duties vary depending on the manufacturer
This is what the rates look like: they vary depending on the manufacturer and are added to the ‘normal’ rate of 10 percent. This depends on how strongly the Chinese state supports the company in question and where the competitive advantages are greatest. For the SAIC brand this is no less than 35.3 percent, for Geely (Volvo) 18.8 percent. For BYD cars, the surcharge is 17 percent. Tesla electric cars have a lower rate of 7.8 percent because they are not as heavily supported by the government and do not work with Chinese manufacturers (joint venture). VW, BMW and Mercedes are also affected by the measure because they work with Chinese partners. Here, about 21 percent is likely to be made for cars imported from China.
German car manufacturers also took massive action in advance against the extension of the customs measures. BMW has already responded to the decision: this is a “fatal signal”. A trade dispute can only end with losers. There are fears that the Chinese will strike back and take retaliatory measures that will weaken the European economy.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
