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A decision by the EU to impose an additional tariff on top of the already existing 10 percent tariff on electric cars produced in China has angered Chinese car manufacturers.
On Tuesday, the EU published a draft of the conclusions in an investigation into possible Chinese state aid to the country’s electric car industry.
The conclusions have confirmed to the EU that there is distortionary state aid, and therefore they are maintaining the additional tariffs of up to 36.3 percent.
However, there have been some shifts in how severely the various car brands are affected.
For example, Tesla will only face an additional 9 percent tariff on cars exported from the company’s Chinese factories to Europe.
This is because the EU Commission finds it proven that the company receives less Chinese aid than many of the other manufacturers.
In contrast, the Chinese car manufacturer BYD will henceforth face an additional 17 percent tariff on cars exported to Europe.
The EU Commission has called on the Chinese government to engage in negotiations that could reduce the punitive tariffs if state aid is reduced.
However, the Chinese car manufacturers’ association warns that the punitive tariffs are damaging Chinese companies’ willingness to invest in Europe.
This, in turn, means that the development of the European car industry and the green transition will be set back, as well as affecting the prospects for more new jobs.
As a kind of counter-response to the European punitive tariffs, China has launched an investigation into some of the dairy products that the Chinese import from the EU.
The investigation will also determine whether European dairies receive distortionary state aid.
A similar investigation was announced about a month ago into imported pork.