EU follows Türkiye’s lead with additional tariffs on Chinese cars

As debates swirl around the impact of the Turkish government’s decision to 40% extra tax on cars from China, the EU is poised to announce its tariffs, expected to range between 10% to 25%, this week.

The European Commission is set to officially announce measures this Wednesday, part of its investigation into state subsidies for China’s electric car production, including temporary additional customs duties on imported products.

Chinese electric cars: 20% cheaper than European models

Recent years have witnessed a significant surge in the market share of Chinese manufacturers in European electric car sales. Electric car prices in similar segments in China are roughly 20% lower compared to models manufactured in Europe.

This discrepancy has propelled the sales of low-priced and subsidized Chinese electric cars, surpassing competitors. The market share of Chinese brands in the EU has skyrocketed from below 1% in 2019 to 8%.

EU probes subsidized Chinese electric cars

In September last year, European Commission President Ursula von der Leyen initiated an investigation into imported Chinese electric cars, expressing worries about the market disruption caused by artificially low prices fueled by significant state subsidies.

The investigation specifically targets subsidies granted to electric cars manufactured in China and shipped to the EU, regardless of the brand’s origin country.

Expected additional tariff: 25%

The EU currently imposes a 10% tariff on electric cars from China, but an additional tariff ranging from 10% to 25% is anticipated.

China contends that it does not subsidize its automotive sector, arguing for highly efficient production aiding Western countries in achieving their green goals.

US imposed a 100% tariff

Last month, the U.S. government raised the tariff rate on imported Chinese electric cars to 100%, aiming to spur domestic investments. It also decided to impose additional customs duties on Chinese-origin gasoline and hybrid passenger cars.

Türkiye had previously implemented a 40% additional tariff on electric cars imported from China, following similar measures by the EU and the U.S.

Tweet: After Türkiye’s lead, the EU also imposes additional tariffs on Chinese cars, reflecting concerns over subsidized imports impacting local industries