EU states set to greenlight extra tariffs on EVs from China

EU countries are expected to confirm Friday hefty tariffs on electric cars made in China, a move dividing the bloc as some states led by Germany fear sparking a trade war with Beijing.

The European Commission provisionally approved additional duties in June after an inquiry concluded that Beijing's state aid to auto manufacturers was unfair.

China has slammed the new tariffs of up to 35.3 percent -- on top of existing duties of 10 percent -- as "protectionist" and warned they would trigger a trade war.

Brussels says it aims to protect European carmakers in a critical industry that provides jobs to around 14 million people across the European Union but does not benefit from hefty state subsidies like in China.

Canada and the United States have in recent months imposed much higher tariffs of 100 percent on Chinese electric car imports.

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The EU duties would become definitive for five years from October 31 if approved by representatives of the bloc's 27 member states in a vote expected Friday morning.

Despite the opposition of Germany, together with Spain, Slovakia and Hungary, EU diplomats told AFP there are not enough countries to oppose the tariffs.

EU rules stipulate that to stop the commission's additional tariffs there need to be at least 15 states voting against, representing 65 percent of the bloc's population.

France, Italy and Poland as well as the Baltic states are expected to back the duties.

Unless there is a blocking majority, the commission will have free rein to make definitive the duties, which also apply to vehicles made in China by foreign groups such as Tesla, which face a rate of 7.8 percent.

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The tariffs have pitted France and Germany against each other, with Paris arguing they are necessary to level the playing field for EU carmakers against Chinese counterparts.

But Germany, renowned for its strong auto industry and its key manufacturers including BMW, Volkswagen and Mercedes heavily invested in China, says the EU risks harming itself with tariffs, and has urged for negotiations with Beijing to continue.

In an indication of fears spreading in Europe, Spanish Prime Minister Pedro Sanchez reversed course and asked Brussels last month to "reconsider", despite Madrid's initial support.

EU's tightrope

Hungary has also been vocal in its opposition, with Foreign Minister Peter Szijjarto saying this week that Budapest would vote against a "dangerous" proposal.

Beijing has threatened to retaliate forcefully against the tariffs and opened probes into European brandy, dairy and pork products imported into China.

China tried in vain to stop the duties, hoping to resolve the issue through dialogue, but talks have so far failed to lead to an agreement that satisfies the EU.

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The commission has said that any duties could be lifted later if China addresses the EU's concerns.

Trade tensions between China and the EU are not limited to electric cars, with inquiries launched by Brussels also targeting Chinese subsidies for solar panels and wind turbines.

The bloc faces a difficult task as it tries to foster its clean tech industry and invest in the green transition without sparking a painful trade war with China.

Since July, the maximum additional tariff rate for EVs has been revised downwards -- to 35.3 percent from up to 38 percent -- following EU discussions with interested parties.

Source: AFP