The European Union is set to vote on Oct. 4 on whether to impose tariffs as high as 45% on electric vehicles (EVs) imported from China. This decision follows a European Commission investigation that found China unfairly subsidizes its EV industry, putting European manufacturers at a disadvantage.
The proposed tariffs would add to the existing 10% duty, potentially increasing total tariffs on Chinese EVs to 35% starting in November for the next five years, unless a qualified majority of member states—representing 65% of the EU's population—opposes the move. The European Commission has been negotiating with Beijing in hopes of finding a resolution to avoid the tariffs, but talks may continue even after the vote.
China denies the subsidy accusations and has threatened retaliatory tariffs on European goods such as dairy, brandy, pork, and large-engine cars. Major member states, including Germany and Spain, have expressed concern that the tariffs could lead to a trade war. Germany’s Economy Minister, Robert Habeck, voiced opposition to countervailing duties, advocating for a political solution to prevent escalation.
The EU is open to a negotiated solution, possibly involving a mechanism to control exports rather than imposing tariffs. However, any deal must meet World Trade Organization (WTO) rules and address the impact of China’s subsidies, while being enforceable by the EU.
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