Europe Shocks China With 38% Electric Vehicle Tariffs

The European Commission shocked China on Wednesday by imposing duties of up to 38.1 percent on electric vehicle imports from July 4 — a level that was much higher than expected — potentially triggering a trade war at a time of great political uncertainty in Europe.

The provisional duties, which come after a months-long investigation into Chinese state aid to its EV-makers, drew immediate condemnation from Beijing, which has already threatened retaliation against European farmers and plane makers and launched an anti-dumping probe targeting the French spirits industry.

“When our partners breach the rules, we will assert our rights,” EU trade chief Valdis Dombrovskis said in a written statement shared with reporters.

A senior EU official said Chinese EVs “are subsidized from mine to EU harbor,” because Beijing has pumped money into mining lithium, refining metals, steel-making, production of batteries and cars and shipping them to Rotterdam or Hamburg.

In a first response, the Chinese Chamber of Commerce to the EU expressed its “shock, grave disappointment and deep dissatisfaction with this protectionist measure by the [European Commission]” and denounced the anti-subsidy investigation as a “witch hunt.”