BRUSSELS (dpa-AFX) - The EU is introducing provisional punitive tariffs on the import of electric cars from China this Friday. This is according to the EU Official Journal. The punitive duties will affect, among others, the company BYD, which is currently sponsoring the European Football Championship on a large scale.

The provisional duties are the result of an investigation by the EU Commission. This revealed that the entire value chain for electric cars in China is heavily subsidized and that imports of Chinese electric cars pose a clearly foreseeable and imminent threat of injury to the industry in the EU. According to the Commission, Chinese electric cars are normally around 20 percent cheaper than models manufactured in the EU.

Specifically, the manufacturer BYD is facing a provisional punitive tariff of 17.4 percent, Geely 19.9 percent and SAIC 37.6 percent. Geely produces the electric Smart models #1 and #3 and the Volvo EX30, among others. SAIC builds the MG4, which is popular in Germany and came in second place among electric cars just behind the VW ID.3 in the registration statistics from Flensburg in May. For other manufacturers, 20.8 percent is planned, and companies that did not cooperate with the investigation would be subject to a 37.6 percent penalty duty.

The final introduction of the punitive duties is to take place within four months, unless China makes surprising concessions. Until then, the duties do not have to be paid, only security deposits have to be provided.

Concerns about countermeasures

The EU Commission's approach is causing concern in Germany, as there are fears of retaliatory measures that could affect German car manufacturers in particular. China is the largest car market in the world and, according to the German Association of the Automotive Industry (VDA), was the third-largest export market for cars from Germany in 2023 - after the USA and the United Kingdom. However, German companies could not only be affected by countermeasures, but also by the EU measures themselves - as some of them produce in China for export.

With a view to possible retaliatory measures by China, the German Association of the Automotive Industry (VDA) recently warned that if China were to introduce import duties on vehicles with an engine capacity of more than 2.5 liters, this would hit the industry hard. In 2023, around a third of vehicles exported from Germany to China would fall into this size category.

Federal Economics Minister Robert Habeck (Greens) is therefore also calling for a political solution by November. He recently emphasized that Germany has no interest in "a race for customs duties and fragmented markets as a result". As an exporting country, China has no interest in this either. French President Emmanuel Macron, on the other hand, has spoken out in favor of punitive measures against China's e-cars in the past.

Negotiations between Brussels and Beijing continue

Talks have recently been held between Chinese Trade Minister Wang Wentao and EU Trade Commissioner Valdis Dombrovskis, among others. Whether they will lead to a settlement of the trade conflict is, however, completely open. The EU Commission has repeatedly emphasized that a negotiation outcome must eliminate the influence of harmful subsidies. Talks between Brussels and Beijing are to continue in the coming weeks.

If the authority headed by Ursula von der Leyen comes to the conclusion that China is not making sufficient progress, it can submit a proposal for the introduction of definitive punitive tariffs in the next four months. The EU member states could only stop the proposed tariffs if a so-called qualified majority opposes the proposal.

As a rule, a qualified majority means that at least 15 EU states, which together make up at least 65 percent of the total population of the Union, must agree. If there is no qualified majority for or against the proposal, the Commission can either adopt it or submit a new, amended version./aha/DP/jha