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Chinese EVs hit with duties in biggest European Union trade case yet
Photo Courtesy: Representational image from Wallpaper Cave

Chinese EVs hit with duties in biggest European Union trade case yet

| @indiablooms | 06 Jul 2024, 02:30 pm

Brussels/IBNS: The European Union (EU) will impose tariffs of up to 37.6 percent from Friday on imports of electric vehicles (EVs) manufactured in China, ratcheting up tensions with Beijing in Brussels’ largest trade case yet, Reuters reported, citing EU officials.

However, there is a four-month window during which the tariffs are provisional and intensive talks are expected to continue between the two sides as Beijing threatens wide-ranging retaliation, reports Reuters.

According to reports, the European Commission’s provisional duties of between 17.4 percent and 37.6 percent without backdating are designed to prevent what the commission's President Ursula von der Leyen has said is a threatened flood of cheap EVs built on State subsidies.

The rates, which are laid out in a 208-page document published on Thursday (July 4), are almost exactly the same as those announced by the European Commission, the primary executive arm of the European Union, on June 12.

The executive made slight adjustments after firms identified minor calculation errors in the initial disclosure, as reported by Reuters.

In response, China said it would take “all necessary measures” to safeguard the country's interests.

Experts said Beijing's "necessary measures" could include retaliatory tariffs on exports to China of products such as cognac or pork.

However, EU trade chief Valdis Dombrovskis told Bloomberg that there is no basis for China to retaliate.

The Chinese Commerce Ministry on Thursday said that both sides have so far held several rounds of technical talks over tariff issue.

“We hope the European and Chinese sides will move in the same direction, show sincerity, and push forward with the consultation process as soon as possible,” He Yadong, a Ministry spokesperson, was quoted as saying by Reuters.

European auto-industry executives, however, warned against the tariffs, fearful of counter-tariffs or other measures that could affect the competitiveness of their cars in China when they are already struggling to keep up with a growing number of local competitors in the EV market.

According to the European Commission, Chinese brands’ share of the EU market has risen to 8 percent from below 1 percent in 2019 and could reach 15 percent next year.

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