EU's provisional duties on Chinese EVs spark industry backlash

BRUSSELS, July 4 (Xinhua) -- The European Commission announced on Thursday it will impose provisional countervailing duties on imports of battery electric vehicles (BEVs) from China starting Friday, sparking backlash from various business sectors.

The duties, ranging from 17.4 percent to 37.6 percent, target imports of BEVs produced in China.

Three Chinese companies -- BYD, Geely and SAIC -- will face additional duties of 17.4 percent, 19.9 percent and 37.6 percent, respectively, on top of the European Union's (EU) standard 10-percent duty on car imports.

Tesla's BEV operator in China may receive an individually calculated duty rate at the definitive stage, as it has filed a substantiated request, the statement added.

Following the EU's announcement, the China Chamber of Commerce to the EU (CCCEU) voiced strong opposition to the protectionist measures, urging the EU to listen to the common voices and consider the shared concerns of businesses from both China and Europe.

The tariffs will present significant challenges to future China-Europe cooperation in the EV industry, particularly for European companies seeking to utilize China's EV supply chain to develop globally competitive products, the CCCEU said in a statement.

"We hope that the two sides will soon find a solution to avoid countervailing measures that harm the mutually beneficial cooperation and joint development of the China-EU automotive industry," it added.

The EU's decision has also drawn criticism from member states and the vehicle industry.

BMW chief Oliver Zipse said the introduction of additional import duties "leads to a dead end."

"It does not strengthen the competitiveness of European manufacturers," Zipse stressed. "On the contrary, it not only harms the business model of globally active companies, but also limits the supply of electric cars to European customers and can therefore even slow down decarbonization in the transport sector."

Such measures heavily infringe upon the principle of free trade, which is also propagated by the EU, he added.

"The timing of the EU Commission's decision is detrimental to the current weak demand for BEV vehicles in Germany and Europe," a spokesperson with Europe's largest carmaker Volkswagen said in a statement on Thursday.

Volkswagen stressed, "The negative effects of this decision outweigh any benefits for the European, and especially the German, automotive industry."

German Association of the Automotive Industry released a statement on Wednesday, saying that anti-subsidy tariffs are not in the EU's interest. "The European anti-subsidy tariffs would not only affect Chinese manufacturers, but also European companies and their joint ventures in particular."

It stated that a large proportion of vehicle imports from China into the EU come from European and American manufacturers. The announced anti-subsidy tariffs are even higher for European companies than for Chinese companies.

The association also noted that no excessive market penetration of Chinese battery-electric vehicles is expected in the medium to long term, citing analyses suggesting that the market share of Chinese manufacturers in the overall passenger car market in Europe will likely settle in the range of 5 percent to 10 percent.

"The EU should refrain from imposing the announced anti-subsidy tariffs and find a negotiated solution with China," the association said.

Hildegard Muller, the association's president, stressed the "imperative" need for an open and constructive dialogue between China and the European Commission to find a resolution. "We wholeheartedly endorse this approach and urge both sides to successfully conclude negotiations," she said.

The European Commission noted that consultations with the Chinese government have intensified recently, and contacts continue at a technical level to reach a WTO-compatible solution.

The provisional duties, slightly adjusted from earlier pre-disclosed rates, will apply for a maximum of four months. A final decision on definitive duties will be voted on by EU member states. If adopted, the duties would be in place for five years.

On Thursday, the Chinese Ministry of Commerce (MOC) said that China hopes that the EU will work with it in the same direction and show sincerity in advancing the consultation concerning the EU's anti-subsidy probe into Chinese electric vehicles.

The consultation should be based on facts and rules and should result in a solution that is acceptable for both sides as soon as possible, MOC spokesperson He Yadong said at a press briefing.