The European Commission said on Friday it had received enough support in a vote of EU members to impose tariffs of up to 45% on imports of Chinese-made electric vehicles in the bloc’s highest-profile trade case, risking retaliation from Beijing.
France-based broadcaster Euronews cited diplomatic sources as saying that Poland voted in favor of the move, but Germany, the region’s biggest economy and major car producer, opposed it.
The European Commission, which oversees the bloc’s trade policy, has proposed final duties for the next five years to counter what it sees as unfair Chinese subsidies after a year-long anti-subsidy investigation.
In a vote on Friday, 10 EU members backed tariffs and five voted against, with 12 abstentions, EU sources said.
It would have taken opposition from a qualified majority of 15 EU members, representing 65% of the EU population, to block the proposal.
The EU executive said it had obtained “the necessary support” to adopt the tariffs, although it would continue talks with Beijing to find an alternative solution.
BMW Chief Executive Oliver Zipse said a quick settlement was needed between Brussels and Beijing to prevent a trade conflict.
Volkswagen said the planned tariffs were “the wrong approach.”
Car maker Stellantis said it supported free and fair competition and that the sector was under pressure from ambitious carbon reduction plans and “the Chinese global commercial offensive.”
‘Economic cold war’ with China?
Hungarian Prime Minister Viktor Orbán said on Friday that the EU was headed for an “economic cold war” with China.
The EU’s stance towards Beijing has hardened in the last five years. It views China as a potential partner in some issues, but also as a competitor and a systemic rival.
This year, in moves seen as retaliation, Beijing launched its own investigations into imports of EU brandy, dairy and pork products.
According to the European Commission, China’s spare production capacity of three million EVs per year, which needed to be exported, is twice the size of the EU market. Given 100% tariffs in the United States and Canada, the most obvious outlet for those EVs is Europe.
The EU executive has said it is willing to continue negotiating an alternative to tariffs with China and could re-examine a price undertaking involving a minimum import price and typically a volume cap, having previously rejected those offered by Chinese companies.
The tariffs range from 7.8% for Tesla to 35.3% for SAIC and other companies deemed not to have cooperated with the EU investigation. These tariffs are on top of the EU’s standard 10% import duty for cars.