
BRUSSELS (AP) β European Union countries on Friday voted to impose duties on imports of electric vehicles from China, as talks continued between Brussels and Beijing to find an amicable solution to their trade dispute before an end-of-October deadline.
Electric vehicles have become a major flash point in a broader trade dispute over the influence of Chinese government subsidies on European markets β which has forced the undercutting of EU industry prices β and Beijingβs burgeoning exports of green technology to the bloc.
The European Commission, which manages trade on behalf of the 27 member countries, welcomed their majority approval of its plan to impose the duties, even though EU automotive powerhouse Germany and Hungary voted against it.
Those duties will come into force on Oct. 31 unless China has a solution to end the standoff.
Commission spokesman Olof Gill said that any solution proposed by Beijing would have to be fully compatible with World Trade Organization rules, remedy βthe injurious subsidizationβ by China, and be βmonitorable and enforceable.β
Beijing opposes the duties. βChina firmly opposes the EUβs unfair, non-compliant and unreasonable protectionist practices in this case, and firmly opposes the EUβs imposition of anti-subsidy duties on Chinese electric vehicles,β a spokesperson at Chinaβs Commerce Ministry said in comments posted online.
Still, it means that the EU and the Chinese government have four more weeks to negotiate. Talks have already been held between Valdis Dombrovskis, the EU commissioner for the economy, and Chinese Trade Minister Wang Wentao, as well as at the level of technical experts.
The China-EU technical teams are due to resume negotiations on Oct. 7.
The duties on Chinese manufacturers, if applied, would be 17% on cars from BYD, 18.8% on those from Geely and 35.3% for vehicles exported by Chinaβs state-owned SAIC. Geely has brands including Polestar and Swedenβs Volvo, while SAIC owns Britainβs MG, one of Europeβs bestselling EV brands.
Other EV manufacturers in China including Western companies such as Volkswagen and BMW would be subject to duties of 20.7%. The commission has an βindividually calculatedβ rate for Tesla of 7.8%.
The retaliatory duties have run into opposition in Germany, which has Europeβs biggest economy and is home to major automakers.
Germanyβs auto industry association, the VDA, said the German government sent the βright signalβ by voting against them. Hildegard MΓΌller, who chairs the group, called the decision βa further step away from global cooperation.β
She acknowledged that there is a need for negotiations with China and said that they βmust prevent an escalation β ideally avert the tariffs, so that we donβt risk a trade conflict.β
Hungarian Prime Minister Viktor OrbΓ‘n warned that the EU risks starting an βeconomic cold warβ with China, and he pledged to vote against the duties. βThis is the worst thing that can happen to Europe. ... If this continues, the European economy will die,β he told state radio.
According to the commission, Chinese-built electric cars jumped from 3.9% of the EV market in 2020 to 25% by September 2023, in part by unfairly undercutting EU industry prices.
Brussels says companies in China accomplished that with the help of subsidies across the production chain. They ran from cheap land for factories from local governments to below-market supplies of lithium and batteries from state-owned enterprises to tax breaks and easy financing from state-controlled banks.
The rapid growth in market share has sparked fears that Chinese cars will eventually threaten the EUβs ability to produce its own green technology to combat climate change, as well as the jobs of 2.5 million auto industry workers and 10.3 million more people whose jobs depend indirectly on EV production.