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EU Increases Tariffs on Chinese EVs, Sparking Trade Tensions
The European Union (EU) has announced substantial tariff increases on Chinese electric vehicles (EVs), reaching up to 45.3%, marking the end of its largest trade investigation to date. The decision has intensified trade tensions with China, which has retaliated by launching probes into various EU imports.
Tariffs and Impacts on Manufacturers
Following a year-long anti-subsidy investigation, the European Commission confirmed new tariffs ranging from 7.8% on Tesla to 35.3% for SAIC, adding to the standard 10% car import duty. The EU justified these tariffs by citing "unfair subsidies" on Chinese EVs, including preferential financing, reduced raw material costs, and discounted land and batteries. With over 3 million EVs annually manufactured in China—double the EU market demand—Europe has become the primary outlet for Chinese exports, facing competitive pressure on pricing and market share.
Response from China and EU Industry Players
China’s Ministry of Commerce criticized the EU’s decision, calling it "protectionist." The China Chamber of Commerce to the EU expressed disappointment, while European automakers voiced concerns, fearing retaliation on other exports like German gasoline vehicles. German officials, however, support ongoing negotiations, advocating a diplomatic approach to avoid further economic disruptions.
Growing Division in Europe
While the EU generally aims for unity in its China policies, member countries remain divided. Germany, reliant on auto exports, opposes the tariffs, while France and others favor them to protect domestic industries. Despite eight rounds of technical negotiations, a final resolution remains elusive.
