Europe Bends but Does Not Break in the Face of China

The European Commission remains firm on the issue of customs duties on electric vehicles imported from China. Until when?

In early October, the 27 member states of the European Union will have to make a firm and official decision on the customs sanctions applied to imports of electric vehicles manufactured in China. A vote will then determine whether the EU maintains the new customs duties over the next five years.

Specific customs duties, in addition to the 10% already applied, were enacted on July 5th on imports of electric vehicles made in China. It was expected that Brussels would soften under Chinese pressure, but against all odds, the Commission rejected all requests for repeal from China. There have been a few reductions in the customs duty rates by small tenths of a percent, but nothing significant. Only Tesla received a real advantage after an investigation by the Commission into Giga Shanghai. This resulted in Tesla vehicles benefiting from an individual tariff rate of 7.8%, a mere fraction compared to the 35.3% that applies to the SAIC group and all its brands including MG. Given that Tesla is an American manufacturer that also produces many cars in Europe, this was expected.

The Chinese Minister of Commerce, Wang Wentao, and the European Commission’s Trade Commissioner, Valdis Dombrovskis, discussed these customs duties during a formal meeting yesterday, but who can say for certain what was discussed? One can only imagine that the Chinese minister made sure to remind his European counterpart of the numerous trade pressure tactics that China possesses. Will it go as far as a rupture? The answer will come in a few days.

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