Electric vehicles made in China must be registered with Customs authorities as the European Union looks to apply retroactive tariffs after its ongoing probe into subsidies concludes. It can be viewed as a way to deter imports, which the EU says are “massive”, and were 11% higher between October and January compared to before the launch of the investigation. An EU document says that if the EU waited to impose duties, its own manufacturers would “suffer from diminishing sales and reduced production if imports continue at the current increased levels”. It can also be assumed that the Commission is satisfied it has enough evidence to put duties on EVs made in China, but wants to expedite the process. The note, which was published in the EU’s official journal, said that regarding subsidies, “the Commission has at its disposal sufficient evidence tending to show that imports of the product concerned from the PRC are being subsidized”. Either way, the move will further stoke tensions with Beijing, which has reacted angrily to the suggestion that one of its key industries could be subjected to punitive duties in Europe.
The China Chamber of Commerce to the EU (CCCEU) “voiced its disappointment with the proposed mandate”, saying that the “recent surge in Chinese EV imports mirrors the increasing demand for electric vehicles in Europe”. “We earnestly hope that the European side will effectively safeguard the legitimate rights and interests of Chinese enterprises and establish a fair, impartial and non-discriminatory business environment for them,” read a CCCEU statement. The EU said overcapacity in China’s economy was leading to a flood of hi-tech goods that could not be consumed domestically because of sluggish demand. Europe is viewed as one of the last big, open markets for advanced Chinese goods. In other big markets such as the United States and India, they are commonly subjected to import tariffs or other market access restrictions.
Following the EU’s probe, which was launched last September, Britain is reported to be considering its own investigation into EV subsidies. As well as electric vehicles, there are concerns in Europe about overcapacity in Chinese industries, ranging from wind turbines and solar panels to lithium batteries, heat pumps and electrolyzers.
EU negotiators also reached a provisional agreement on a law to ban goods made using forced labor, which was written with the western Chinese region of Xinjiang in mind, although to keep it compliant with World Trade Organization (WTO) rules, China is not mentioned in the text. Last month, Brussels blacklisted three Chinese firms for allegedly flouting its sanctions on Russia by selling dual-use goods made in Europe to Russian customers. During a series of meetings in Brussels, Beijing’s envoy for Eurasia Li Hui asked EU officials to stop sanctioning Chinese companies because they might be needed for Ukraine’s post-war reconstruction.
The EU’s trade in goods deficit with China fell by 27% to €291 billion last year compared to 2022. The 2022 deficit was the highest on record, according to Eurostat, and became another bone of discontent in the relationship. Telecom products were the biggest EU import last year, but vehicles showed the biggest growth, soaring 36.7% compared to 2022, Eurostat found, as reported by the South China Morning Post.
The Global Times adds that Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), said that subsidies for both public buses and private passenger cars stopped in 2022. “When there were subsidies in China, they were on a much smaller scale than those in European countries,” he added. The EU accounted for 47% of China's EV exports in value last year, according to a report by Citi Research in January.
