Europe Slams Chinese Cars with Heavy Taxes!

European tariffs on Chinese cars are set to explode on July 4th. The trade war is just beginning.

Brussels has decided to impose tariffs of up to nearly 50% on Chinese electric vehicles, brushing aside warnings from some governments that this decision may trigger an expensive trade war with Beijing. The European Commission informed car manufacturers on Wednesday that it would provisionally apply additional tariffs ranging from 17% to 38% on Chinese electric vehicles imported starting next month. These additional taxes will be added to the existing 10% tariff on all Chinese electric vehicles.

The amount of these taxes is adjusted based on the cooperation of manufacturers in the ongoing investigation into Chinese subsidies. Major exporters, including BYD, the world’s largest electric vehicle manufacturer, and Geely, will face tariffs between 17% and 20%. European brands such as Mercedes and Renault exporting electric vehicles made in China will pay 21%, while Tesla’s case has not yet been decided. Volvo has anticipated these decisions by moving a large portion of its EX30 production to Europe.

MG the big loser

Manufacturers that did not cooperate with the investigation will be subject to the maximum rate of 38%. Among them is the state-owned manufacturer SAIC, whose flagship brand MG is the biggest loser in this clean-up operation. They have only 3 weeks left to respond to the European Commission’s requests and hope for some leniency.

Beijing already applies a 15% tariff on European electric vehicles. There is no doubt that the retaliation will be bloody and will certainly extend beyond just the automotive sector. Germany, Sweden, and Hungary have already stated that they do not approve of this decision, fearing Chinese retaliation. France, which had supported these protectionist measures, remains silent for the moment, but the current political cacophony does not make this a surprise.

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