On Wednesday, May 29th, several foreign media outlets cited sources saying that the European Union may wait until after the European Parliament elections to notify businesses of a decision to increase import tariffs on Chinese electric cars.
The European Commission initiated an anti-subsidy investigation on electric vehicles from BYD, SAIC Group, and Geely starting last October. Originally estimated to be announced on June 5th, the decision on whether to impose tariffs on Chinese electric cars may now be delayed until after the elections to avoid impacting the political atmosphere, according to reports.
The potential increase in tariffs could result in billions of dollars in new costs for Chinese automakers operating in the EU market.
German magazine “Der Spiegel” was the first to report the EU’s plan to postpone the tariff decision. The delay is reportedly aimed at preventing the issue from becoming politically charged ahead of the elections happening from June 6th to 9th.
Reuters also covered the story, quoting sources who revealed that the EU is expected to announce temporary tariffs on June 10th due to technical issues with the documents at the last minute.
The EU had already warned the three Chinese electric car companies under investigation for providing insufficient data.
A spokesperson for the European Commission told Politico that no decision on the tariffs has been made yet, but it could be announced within a week after the European Parliament elections. This timing would precede the G7 summit where the EU Commission President Ursula von der Leyen, along with leaders of Germany, France, and Italy, are set to attend.
The investigation, which began on October 4th last year, can last up to 13 months. The Commission may start imposing temporary anti-subsidy duties after nine months of the investigation, which would be from July 4th.
However, some trade lawyers interviewed by Politico doubted if the EU could delay the announcement beyond June 6th due to rules requiring a four-week notice period to companies before temporary tariffs come into effect.
The rapid growth of Chinese electric cars in the European market has raised concerns within the EU automotive industry, which directly or indirectly supports nearly 14 million jobs, accounting for 6.1% of the EU’s workforce. The influx of cheap Chinese electric cars poses a direct threat to the industry.
The Chinese authorities have expressed strong dissatisfaction with the EU’s investigation and retaliated against European products like white spirits. Chinese state media hinted at potential restrictions on luxury cars and pork products from Europe in response.
The ongoing trade tensions between the EU and China highlight the complexities and impacts of global trade dynamics on various industries and economies.