The European Commission has issued a warning to three Chinese electric car manufacturers, as revealed by two informed sources to Reuters, stating that they have not provided sufficient information for the EU’s anti-subsidy investigation.
If the European Commission finds the information provided by the sampled companies, namely BYD, SAIC, and Geely, to be inadequate, it may resort to using evidence from other sources to calculate import tariffs, which could ultimately lead to tariff increases.
Such warnings are common in EU trade protection cases. Indeed, in the past 10 anti-subsidy cases against China, the European Commission has used this “existing facts” approach to fill in certain gaps.
The aforementioned sources mentioned that these Chinese companies have the right to respond to the warning.
The European Commission, which oversees trade policies for the 27 EU countries, initiated an investigation in October last year to determine whether battery-powered electric vehicles produced in China are receiving distortive subsidies and whether the EU needs to impose additional tariffs on them.
Earlier this month, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) stated that this investigation is unfavorable to Chinese manufacturers. The Chamber complained that the European Commission demanded excessive information from the sampled Chinese manufacturers.
Shi Yonghong, Vice President of the Chamber, commented that “the Commission may potentially exaggerate the extent of subsidies by using the so-called ‘existing facts’ in trade protection terms.”
In response, a spokesperson for the European Commission stated, “This anti-subsidy investigation is thorough, fair, and fact-based.”
The investigation by the European Commission was officially launched on October 4th last year and can last up to 13 months, with provisional anti-subsidy taxes being imposed nine months after the investigation commences.