BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - The European Union informed Beijing about the hike in tariffs on electric vehicles imported from China, potentially paving a way to trade war.
Following the tariff implementation, Chinese manufacturers have to pay additional tariffs of 17.4 percent and 38.1 percent on top of existing 10 percent, pushing the overall tariffs to around 48 percent, the European Commission said.
The announcement follows the agency's investigation into whether China's state support to car manufacturers has allowed them to sell EVs at a lower price compared to European carmakers.
The nine-month investigation, launched in October, found that that the EV industry in China 'benefits from unfair subsidization, which is causing a threat of economic injury.'
'The EU's green transition cannot be based on unfair imports at the expense of EU industry,' the Commission stated as China-manufactured cars accounted for 25 percent of EU market in 2023, up from 3.9 percent.
The agency added that the level of tariffs will differ based on their brands. The top tariff is faced by SAIC with 38.1 percent, whereas Tesla (TSLA)-rival BYD (0285.HK) has the lowest additional tariff of 17.1 percent. Geely, a stakeowner of Volvo (VOLVY.PK), faces a tariff of 20 percent.
Meanwhile, the EV companies which cooperated with the investigation will face a tariff of 21 percent, while those who didn't will have to pay an additional duty of 38.1 percent.
Reacting to EU's announcement, Lin Jian, a Chinese foreign ministry spokesperson, stated that the investigation was a 'typical case of protectionism'.
The Chinese commerce ministry warned that the move would create and escalate trade tensions, and hurt European customers.
Moreover, the Beijing administration vowed to take 'all necessary measures to firmly defend the legitimate rights and interests of Chinese companies.'
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