The European Union said on Wednesday that it would impose additional tariffs of up to 38 percent on electric vehicles imported from China into the bloc, in what E.U. leaders called an effort to protect the region’s manufacturers from unfair competition.
The move, a month after President Biden quadrupled U.S. tariffs on Chinese electric vehicles to 100 percent, opens another front in escalating trade tensions with China amid growing fears about a glut of Chinese green tech goods flooding global markets.
The actions by the European Union and the United States also reflect the challenges that traditional automakers in Europe and the United States face from up-and-coming Chinese companies founded with a focus on electric vehicles and much lower cost bases than their rivals in the West.
But unlike U.S. carmakers, several of their European counterparts are deeply entwined in the Chinese market, and their cars produced there will also be subject to the higher tariffs. They have criticized the European Union’s move to increase duties from 10 percent, fearing retaliation from China, as well as an increase in prices across the market and a drop in demand for battery-powered cars.
The increases announced on Wednesday, which come on top of the existing 10 percent duties, are preliminary and will take effect on July 4. They range from 17.4 percent to 38.1 percent for three of the leading Chinese manufacturers, BYD, Geely and SAIC. The tariffs were calculated based on the level of cooperation with European officials, who have spent the past few months investigating the level of support from the Chinese government for these companies.
Other automakers producing electric vehicles in China, including European companies with factories or joint ventures there, face a tariff of 21 percent or 38.1 percent, the European Union said. Those rates also depend on their cooperation with the investigation.