EU to impose duties of up to 38% on Chinese electric vehicles

LONDON (Reuters) -The European Commission said on Wednesday it would set provisional duties of up to 38.1% on imports of Chinese electric vehicles, a move likely to draw possible retaliation from China.

COMMENTARY:

LIN JIAN, CHINESE FOREIGN MINISTRY SPOKESPERSON

“What I want to emphasize is that this anti-subsidy investigation is a typical case of protectionism. For this reason, the European side imposed tariffs on electric vehicles imported from China, which violates the principles of market economy and international trade rules, damages China-EU economic and trade cooperation and the stability of the global automobile production and supply chain. It will ultimately undermine Europe’s own interests.

“We urge the EU to abide by its commitment to support free trade and oppose protectionism, and work with China to safeguard the overall situation of China-EU economic and trade cooperation. China will take all necessary measures to firmly safeguard its legitimate rights and interests.”

MARKUS FERBER, GERMAN MEMBER OF EUROPEAN PARLIAMENT

“In imposing tariffs on Chinese electric vehicles, the European Commission has made the right call.

“In trade policy, the EU can no longer just watch Chinese dumping practices like a deer caught in the headlights. If the European Union is serious about building up a competitive EV industry, we need to fight back.

“We cannot expect European carmakers to invest massively into new capacities while they are undercut by Chinese dumping practices. We have seen this story play out once before in the solar industry and it did not have a happy ending. We would be wise not make the same mistake twice.

“Tariffs and other trade barriers are only ever the last-call option, but if the competition is not playing fair, there is no other way. This is not an act of protectionism, but rather a measure that levels the playing field.”

TERESA RIBERA, ENERGY MINISTER, SPAIN

“I believe that the European automotive industry is an extremely important industry that needs to catch up in terms of the transformation of models, of mobility proposals and to move towards electric cars.

“Obviously, if this breach of international trade rules occurs, we must support the Commission’s proposal and obviously it is also our obligation to support the European automobile industry as a whole and, in particular, the Spanish industry, so that it remains a competitive, modern, up-to-date industry with a significant weight in international markets.”

ANDREW KENNINGHAM, CHIEF EUROPE ECONOMIST, CAPITAL ECONOMICS

“The immediate effect of the additional duties would be very small in macroeconomic terms. The EU imported around 440,000 EVs from China in the twelve months ending in April, which were worth €9bn or around 4% of household expenditure on vehicles.

“But the anti-subsidy duties are intended to limit the future growth in EV imports which would otherwise take place rather than to block existing trade.

“The decision marks a big change in EU trade policy because, although the EU has used trade defence measures regularly in recent years, including against China, it has not previously done so for such an important industry. And Europe has been reluctant to engage in the kind of protectionism that the US has deployed since Donald Trump’s presidency.”

(Reporting by Reuters bureaux in Europe and in China; Editing by Emelia Sithole-Matarise)