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EU Hits Chinese EV Battery Imports with Provisional Duties Amid Trade Talks

EU Hits Chinese EV Battery Imports with Provisional Duties Amid Trade Talks

Listen to this story:
  • EU imposes provisional duties on Chinese BEV imports after finding unfair subsidies.
  • Consultations with China continue to seek a WTO-compatible resolution.
  • Duties range from 17.4% to 37.6% for various Chinese producers.

EU Imposes Provisional Duties on Chinese BEVs

The European Commission has imposed provisional countervailing duties on battery electric vehicle (BEV) imports from China, nine months after initiating an anti-subsidy investigation. The investigation concluded that China’s BEV sector benefits from unfair subsidies, posing a threat to EU producers.

Unfair Subsidies Impact

Valdis Dombrovskis, Executive Vice-President, discussed these issues with Chinese Trade Minister Wang Wentao. He stated, “We aim for a solution that addresses the EU’s concerns effectively and is compliant with WTO rules.

Duties Breakdown

  • BYD: 17.4%
  • Geely: 19.9%
  • SAIC: 37.6%
  • Other cooperating producers: 20.8%
  • Non-cooperating companies: 37.6%

These provisional duties are effective from July 5, 2024, for up to four months. A final decision on definitive duties will be made by EU Member States within this period.

Aligning with U.S. Measures

This move aligns with recent U.S. actions, where President Joe Biden announced significant tariff increases on Chinese imports, including EV batteries, on May 14, 2024. The U.S. tariffs, affecting $18 billion worth of goods, aim to address trade imbalances and protect domestic industries. Biden emphasized, “American workers can out-work and out-compete anyone as long as the competition is fair.” The U.S. quadrupled EV duties to over 100%, similar to the EU’s approach of imposing substantial duties on Chinese BEVs.

Trade Relations and Future Implications

China has vowed to retaliate against these measures. Its commerce ministry declared opposition to the U.S. tariff hikes and promised to take steps to defend its interests. This escalation marks a significant development in the ongoing trade tensions between the economic giants. Both the EU and U.S. are addressing unfair trade practices, reflecting a shared commitment to fair competition and economic protection.

Procedure and Next Steps

The ordinary trade defense procedure includes Member States voting on provisional measures within 14 days of publication in the Official Journal. Interested parties can request hearings and provide comments within 15 days from the entry into force of provisional measures. After considering these comments, the Commission will disclose its proposal for definitive measures, if any, allowing adequate time for further comments.

The Commission will present the final determination to Member States, who will vote pursuant to the examination procedure under comitology rules. This vote will have a binding effect. Any potential measures will be in force for five years, extendable upon substantiated request and subsequent review.

The EU’s imposition of provisional duties on Chinese BEV imports highlights its determination to protect domestic industries from unfair competition. As consultations with China continue, the EU seeks a resolution that addresses its concerns and complies with WTO regulations. This move, in conjunction with similar U.S. actions, underscores a coordinated approach to trade defense, ensuring fair competition and economic stability.

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