The European Union will impose temporary tariffs as high as 37.6% on electric cars imported from China starting from Friday (July 5th). This move aims to protect domestic manufacturers from unfair competition as Chinese companies are accused of receiving excessive subsidies from the Chinese government.
At the same time, the EU is investigating a series of Chinese government practices of excessive subsidies, including whether Chinese clean tech producers are dumping subsidized goods into the EU market and if Chinese companies benefit unfairly from subsidies while operating within the EU.
The European Commission conducting the investigation stated that its objective is to prevent unfair competition and market distortions.
According to Reuters, here are some key points you need to know about the investigation:
On June 12th, the European Commission announced new tariffs on imported electric cars produced in China due to excessive subsidies provided by China, leading to a surge of low-cost Chinese electric cars into the EU.
The temporary tariffs will take effect on July 5th, and the anti-subsidy investigation will continue until November 2nd, potentially resulting in a final tariff lasting for five years.
After the increased tariffs, BYD will face a 17.4% tariff, Geely Automobile will face a 19.9% tariff, and SAIC Group will face a 37.6% tariff. These rates are on top of the original 10% tariff.
In response, Beijing stated that it will take “all necessary measures”. EU Trade Chief Valdis Dombrovskis said there is no reason for China to retaliate.
“Our objective is to ensure fair competition and a level playing field,” he told Bloomberg in an interview.
The EU believes that companies that cooperated with the investigation, including Western car manufacturers Tesla and BMW, will face a 20.8% tariff, while companies that did not cooperate will face a 37.6% tariff.
Dombrovskis also mentioned ongoing negotiations with China. “In fact, if there is a mutually beneficial solution, we can still find a way to not apply the tariffs in the end.”
“But clearly, this solution needs to address the market distortions we are facing now… and it needs to meet market requirements,” he added.
Meanwhile, Tanja Gönner, Director General of the German Industrial Association “BDI”, called for unity from the EU Commission and member states in dealing with the external challenges.
The European Commission began an anti-dumping investigation on steel products plated or coated with Chinese tin on May 16th.
According to the EU official journal, the investigation was initiated following a complaint filed by the European Steel Association (Eurofer).
The investigation will conclude within 14 months and may impose temporary tariffs within 7 to 8 months.
The European Commission initiated an anti-dumping investigation on imported wood flooring on May 16th, following a complaint from the European Parquet Federation.
The investigation focuses on the assembly of multi-layer wood flooring materials.
Bamboo or mosaic flooring materials are not part of the investigation.
On April 24th, the EU Commission launched an investigation into the Chinese government’s procurement of medical equipment.
This is the first investigation under the EU International Procurement Instrument, aimed at preventing unfair preferences for domestic suppliers among countries.
If the EU Commission finds that European suppliers cannot fairly access the Chinese market, restrictions may be imposed on Chinese medical equipment firms participating in EU public tenders.
The investigation will conclude within nine months, with the possibility of a five-month extension by the EU Commission.
On April 9th, EU Competition Commissioner Margrethe Vestager stated that the EU is investigating subsidies provided by Chinese wind turbine suppliers to Europe.
Vestager mentioned that the investigation will cover wind power plant developments in Spain, Greece, France, Romania, and Bulgaria, without naming specific companies.
China labeled the investigation as “discriminatory”.
The German Ministry of Economics expressed close monitoring for a deal where a Chinese supplier won a contract to supply Chinese-made wind turbines for a key infrastructure project in the German North Sea. It is crucial for security and fair competition.
EU Internal Market and Industry Commissioner Thierry Breton stated on May 13th that the EU Commission would end the investigation into Chinese bidders after Chinese companies withdrew from a tender for a solar park project in Romania.
The European Commission initiated two investigations on April 3rd, looking into whether Chinese participants excessively benefited from subsidies in bidding contracts.
The first investigation involved a consortium consisting of Romanian company ENEVO Group and a subsidiary of Chinese LONGi Green Energy Technology Co.
The second consortium under investigation consisted of a subsidiary of Shanghai Electric Group Co., a Chinese state-owned enterprise.
Breton noted that the Commission observed both LONGi Solar and Shanghai Electric withdraw from bidding, leading to the termination of the investigation.