A little over a year after launching its anti-subsidy investigation, the European Commission will impose additional customs duties ranging from 7.8 percent for Tesla to 35.3 percent for China’s SAIC, on top of Standard customs duties of 10 percent on car imports from the EU.

The additional customs duties were formally approved and published in the EU’s Official Journal on Tuesday, meaning they will come into force on Wednesday.

The Commission, which oversees EU trade policy, has said tariffs are needed to counter what it sees as unfair subsidies, including preferential financing and subsidies as well as land, batteries and raw materials at prices below market prices.

It says China’s spare production capacity of 3 million electric vehicles per year is twice the size of the EU market. Given the 100% tariffs in the United States and Canada, the most obvious market for these electric vehicles is Europe.

“China neither agrees nor accepts this decision,” China’s Ministry of Commerce said in a statement on Wednesday.

Every Monday

With exclusive interviews and in-depth coverage of the region’s most pressing business issues, ‘Prospects’ is the go-to source for staying ahead of Indonesia’s rapidly changing business landscape.

for subscribing to our newsletter!

Please check your email for your newsletter subscription.

See more newsletters

“We also noted that the European side indicated that it would continue to negotiate with China on price commitments,” the ministry said, adding that Beijing hoped to find “a solution acceptable to both sides as soon as possible to avoid an escalation of trade frictions.

The Chinese Chamber of Commerce to the EU said it was deeply disappointed by the EU’s “protectionist” and “arbitrary” measure and discouraged by the lack of substantial progress in negotiations aimed at finding an alternative to human rights. customs.

Beijing launched its own investigations into imports of brandy, dairy products and pork from the EU this year, apparently in retaliation.

He also challenged the EU’s interim measures at the World Trade Organization.

European automakers are grappling with an influx of cheaper electric vehicles from their Chinese rivals. The Commission estimates that the share of Chinese brands in the EU market has increased from less than 1% in 2019 to 8% and could reach 15% in 2025. It says prices are generally 20% lower than those of models made in the EU.

The EU’s position towards Beijing has hardened over the past five years. He sees China as a potential partner in some areas, but also as a competitor and systemic rival, but EU members are not united on electric vehicle tariffs.

Germany, the EU’s largest economy and main auto producer, opposed the tariffs in a vote this month in which 10 EU members supported them, five voted against and 12 abstained.

Germany’s Economy Ministry said on Tuesday that Berlin supports ongoing negotiations between the EU and China and hopes for a diplomatic resolution to ease trade tensions while protecting European industry.

“The federal government stands for open markets. Because Germany in particular, as a globally interconnected economy, depends on it,” the spokesperson added.

German carmakers have sharply criticized the EU measures, aware that a possible increase in Chinese import duties on large gasoline engines would hit them hardest.

The moves come as thousands of German industrial workers, including at automakers, strike for higher wages, with Volkswagen possibly set to announce the closure of factories on home soil for the first time in its 87-year history.

Hungarian Prime Minister Viktor Orban said the EU was heading towards an “economic cold war” with China.

However, French automobile association PFA welcomed the taxes, adding that it supported free trade as long as it was fair.

The Commission has conducted eight rounds of technical negotiations with China to find an alternative to tariffs and has said negotiations could continue once tariffs are imposed.

The two sides are examining possible minimum price commitments for imported cars and agreed on Friday to hold a new round, although the Commission said “significant gaps” remained.

It remains to be seen what impact these tariffs will have on consumer prices. Some producers may be able to absorb them at least partially.

In the first nine months of 2024, Chinese exports of electric vehicles to the EU fell 7% from a year earlier, but jumped by more than a third in August and September, before the introduction of customs duties, according to data from the China Passenger Car Association. .