EU Provisionally Imposes Countervailing Duties on Chinese Electric Vehicles

The European Commission on June 12 provisionally set countervailing duties on Chinese electric vehicles, though there could still be changes before the provisional rates are posted, no later than July 4. The day after the publication, importers would need a guarantee to cover the amount of duties, but the duties themselves would not be collected until the definitive duties are set, which could be as much as four months later. If a majority of countries in the EU vote against the duties, they wouldn't be levied.

The commission said it found that Chinese EVs receive "unfair" subsidies that cause "a threat of economic injury" to the EU industry.

The provisional CVD rates include 17.4% on exporter BYD, 20% on Geely and 38.1% on SAIC. Other Chinese EV makers that took part in the investigation would be subject to a 21% rate, while non-cooperating exporters would be hit with a 38.1% duty, the commission said. Tesla, which builds cars in Shanghai for the European market, requested the CVD be calculated individually for its cars, but in this filing, Teslas, along with other foreign companies using China as an EV exporting platform, would pay 21%.

All these duties are in addition to the 10% most favored nation tariffs for imported cars.

The commission said that, as a result of its finding, it reached out to Chinese authorities to discuss the subsidies and "explore possible ways to resolve the issues identified in a WTO-compatible manner." As part of the consultations, the commission "pre-disclosed" its provisional CV duties.

Any company making EVs in China that wasn't picked in the final sample that wants its own CV rate "can ask for an accelerated review" within nine months of the commission's announcement.

In response, China's Ministry of Commerce said the EU disregarded "facts and WTO rules, ignored China's repeated strong opposition" and the appeals of many EU governments, according to an unofficial translation. The ministry said China is "strongly dissatisfied" with the move and that the industry is "deeply disappointed and firmly opposed" to the duties. The ministry added that the advantages enjoyed by Chinese EVs come from "open competition" and that the Commission waves the banner of green development in one hand and the stick of protectionism in the other.

The ministry urged the EU to "immediately correct its wrong practices" and implement the consensus reached at the recent meeting between leaders of China, France and the EU.