EU states greenlight extra tariffs on EVs from China
BRUSSELS
EU countries on Friday gave a definitive green light to hefty additional tariffs on electric cars made in China, despite strong opposition led by Germany and fears it will spark a trade war with Beijing.
The European Commission—which provisionally approved the step in June after an inquiry found that Beijing's state aid to auto manufacturers was unfair—now has free rein to impose steep tariffs for five years from the end of October.
Ten member states, including France, Italy, and Poland, supported imposing the tariffs of up to 35.3 percent, on top of existing duties of 10 percent, several European diplomats told AFP.
Only five, including Germany and Hungary, voted against, while 12 abstained, including Spain and Sweden.
China's commerce ministry in response said it "firmly opposes the EU's unfair, non-compliant and unreasonable protectionist practices in this case."
It "firmly opposes the EU's imposition of anti-subsidy duties on Chinese electric vehicles," a spokesperson added.
The ministry urged EU countries to "return to the right track" by resolving trade friction through dialogue, promising to "safeguard the interests of Chinese companies."
Chinese car giant Geely -- one of the country's largest sellers of EVs -- expressed "great disappointment" in the move.
"The decision is not constructive and may hinder EU-China economic and trade relations, ultimately harming European companies and consumer interests," the firm said.
Although the tariffs did not win support from a majority of states, the opposition was not enough to block them—which would have required at least 15 states representing 65 percent of the bloc's population.
That leaves the choice of moving ahead in the hands of the European Commission, which "can be expected to decide in line with its proposal," an EU diplomat said.
China has slammed the new tariffs as "protectionist" and warned they would trigger a trade war.
The extra duties also apply, at various rates, to vehicles made in China by foreign groups such as Tesla—which faces a tariff of 7.8 percent.
Brussels says it aims to protect European carmakers in a critical industry that provides jobs to around 14 million people across the European Union but does not benefit from hefty state subsidies like in China.
Canada and the United States have in recent months imposed much higher tariffs of 100 percent on Chinese electric car imports.
The EU duties have pitted France and Germany against each other, with Paris arguing they are necessary to level the playing field for EU carmakers against Chinese counterparts.
But Germany, renowned for its strong auto industry and its key manufacturers, including BMW, Volkswagen, and Mercedes, heavily invested in China, says the EU risks harming itself with tariffs and has urged for negotiations with Beijing to continue.
In an indication of fears spreading in Europe, Spanish Prime Minister Pedro Sanchez reversed course and asked Brussels last month to "reconsider," despite Madrid's initial support.
EU's tightrope
Hungary has also been vocal in its opposition, and before the vote, Prime Minister Viktor Orban lambasted the tariffs as "the next step in the economic cold war."
Beijing has threatened to retaliate forcefully and has already opened probes into European brandy, dairy, and pork products imported into China.
China tried in vain to stop the duties, hoping to resolve the issue through dialogue, but talks have so far failed to lead to an agreement that satisfies the EU.
The commission has said that any duties could be lifted later if China addresses the EU's concerns.
Trade tensions between China and the EU are not limited to electric cars, with inquiries launched by Brussels also targeting Chinese subsidies for solar panels and wind turbines.
The bloc faces a difficult task as it tries to foster its clean tech industry and invest in the green transition without sparking a painful trade war with China.