The EU has decided to impose tariffs of up to 45% on electric cars from China

Now the European Commission can introduce tariffs that will be in force for five years. The decision came after an investigation by EU authorities found that China was unfairly subsidizing its industry. China rejected the accusation and threatened to impose retaliatory tariffs on European dairy products, brandy, pork and cars.

Over the past three years, the share of Chinese electric vehicles sold in the EU has risen from around 3% to more than 20%, according to Bloomberg. About 8% of this market share is occupied by Chinese brands and the rest by international companies that export cars from China to the EU, including Tesla.

Chinese automakers will have to decide whether to absorb the tariffs or raise prices, the agency stressed, adding that some Chinese companies are considering opening production in Europe to avoid the tariffs.

The parties will continue negotiations to find an alternative to tariffs: “The EU and China continue to work hard to find an alternative solution that is fully compatible with the requirements of the World Trade Organization and suitable to eliminate harmful subsidies identified by the Union European. Commission,” the EC press release said.

China’s Ministry of Commerce warned that the tariffs would “undermine and weaken” the confidence of Chinese companies investing in Europe. At the same time, Daiwa Securities analyst Kevin Lau told Bloomberg that the tariff increase will have a “negligible impact” on Chinese automakers, as in the first four months of 2024, EU countries accounted for only 1-3% of total Chinese car sales. BYD, Geely and SAIC Motor.