China-built EVs hit with EU duties

STORY: The EU confirmed it will impose sweeping tariffs on Chinese-made electric vehicles from Friday (July 5).

Thursday's announcement is likely to raise tensions with Beijing.

But there is a four-month window during which the tariffs are provisional.

Intensive talks are expected to continue between the two sides as China threatens wide-ranging retaliation.

The aim is to prevent what Commission President Ursula von der Leyen called a flood of cheap EVs built with state subsidies hitting the market.

Eric Mamer is spokesperson for the EU Commission.

"What the EU wishes for is a solution, it is not the introduction of tariffs. The introduction of tariffs is not an objective per se. It is a means to correct an imbalance, an unfair competitive situation to the detriment of producers of electric vehicles in the EU compared to those who are producing vehicles in China."

Beijing said it would take "all necessary measures" to safeguard China's interests.

These could include retaliatory tariffs on exports to China of products such as Cognac or pork.

The EU anti-subsidy investigation has nearly four more months to run.

It said talks with China are ongoing and hope to find a mutually beneficial solution that could prevent tariffs.

The EU confirmed Chinese automaker BYD will face duties of 17.4%, while SAIC is hit with 37.6%.

Companies deemed by the EU to have cooperated with the anti-subsidy investigation, including Western carmakers Tesla and BMW, will be subject to 20.8% tariffs.

The issue has caused divides in Europe, and faced strong opposition in Germany.

The country's carmakers made a third of their sales last year in China, and Volkswagen criticised Thursday's move.

Auto industry executives have also warned against the tariffs.

They are fearful of counter-tariffs or other measures that could affect the competitiveness of their cars in China.

The issue will be put to EU members in an advisory vote in the coming weeks.