China on Thursday described a European Union decision to hike tariffs on Chinese electric vehicles as «a blatant act of protectionism.»
The European Commission, the EU’s executive arm, said starting from early next month, it would impose provisional tariffs that would result in Chinese automakers facing additional duties of as much as 38%, up from the current level of 10%, if discussions with China do not lead to an effective solution.
Chinese Ministry of Commerce spokesperson He Yadong on Thursday blasted the move.
“It will not only damage the legitimate rights and interests of China’s electric vehicle industry, disrupt the mutually beneficial cooperation between China and Europe in new energy vehicles, but also will distort the global automotive industry and supply chains, including those of the EU,” he said at a weekly press briefing.
«It is a blatant act of protectionism,» he added.
The EU Commission said an investigation it opened last year into China’s EV subsidies found that China’s battery electric vehicle value chain “benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.”
The extra tariffs would vary by company.
BYD would face an additional 17.4% charge. Geely, which owns Sweden’s Volvo, would be hit with a further 20%. For SAIC, it would be 38.1% extra.
He said China reserves the right to present the case to the World Trade Organization and will take “all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises.”
US President Joe Biden slapped major new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminium and medical equipment last month.
Biden said that Chinese government subsidies ensure the nation’s companies don’t have to turn a profit, giving them an unfair advantage in global trade.
‘Slow motion traffic accident’
Analysts warn that an escalating trade war could break out, raising prices for consumers and hurting exporters and their workers on both sides. Both are major markets for each other — China, a rising economy of more than 1 billion people, and Europe with its relatively well-off population of more than 400 million.
“It’s a little bit like seeing a slow motion traffic accident unfolding,” Jens Eskelund, the president of the European Chamber of Commerce in China said earlier this year. “The accident has not happened yet and … it is still possible to find an off-ramp. It is getting urgent.”
China fired a warning shot in January, launching an anti-dumping investigation into European brandy exports including French cognac. France was a leading supporter of the European Union investigation that resulted in Wednesday’s EV tariff announcement.
The EU is also investigating subsidies given to Chinese wind and solar companies and whether China is unfairly restricting access to the market for medical devices, a long-running complaint of European manufacturers.
