On June 12, the European Commission released a preliminary ruling on its anti-subsidy investigation into Chinese electric vehicles, disclosing its intention to impose a temporary anti-subsidy tax on electric vehicles imported from China.
It is reported that on top of the original 10% ordinary import tariff, it is planned to impose a 17.4% tariff on BYD Auto, a 20% tariff on Geely, and a 38.1% tariff on SAIC Motor. All three manufacturers are sampled in the ongoing EU investigation.
In addition, the EU plans to impose an average anti-subsidy tax of 21% on electric vehicle manufacturers that participated in the investigation but were not sampled; electric vehicle manufacturers that do not cooperate with the investigation will be subject to an anti-subsidy tax of 38.1%.
The European Commission said Tesla, which has a Gigafactory in Shanghai, could "receive an individually calculated tariff rate at a final stage" after "making a well-founded request."
The additional tariffs are the result of the EU's anti-subsidy investigation into Chinese electric vehicles that began last October. The European Commission said in a statement that these tariffs are currently temporary, but if negotiations with China fail to reach a solution, the European Commission will publish a regulation in the Official Gazette detailing the provisional findings that led to this level of tariffs no later than July 4, 2024. The tariffs will take effect the day after they are published, on July 5. The final tariff measures will be announced within four months after the provisional tariffs take effect.
The European Commission, the EU's executive arm, has preliminarily concluded that China's electric vehicle value chain "benefits from unfair subsidies" and announced that it is in the EU's interest to impose "provisional anti-subsidy duties" on electric vehicle imports from China. The Commission noted: "As a result, the influx of large amounts of subsidized Chinese imports at artificially low prices into the EU poses a clear, foreseeable and imminent threat of harm to EU industry."
On June 12, Foreign Ministry Spokesperson Lin Jian responded to the EU's imposition of tariffs on electric vehicles imported from China from next month at a regular press conference, saying that this anti-subsidy investigation is a typical protectionism. The EU's imposition of tariffs on electric vehicles imported from China on this ground violates the principles of market economy and international trade rules, damages China-EU economic and trade cooperation and the stability of the global automobile production and supply chain, and will ultimately damage Europe's own interests.
The Ministry of Commerce stated: China is highly concerned and strongly dissatisfied with this
On June 12, a spokesperson for the Ministry of Commerce responded to the incident, saying that the EU has disregarded facts and WTO rules, ignored China's repeated strong opposition, and ignored the calls and dissuasions of many EU member governments and industries, and insisted on its own way. China is highly concerned and strongly dissatisfied with this, and the Chinese industrial community is deeply disappointed and firmly opposes this.
The Ministry of Commerce stated that the findings disclosed in the EU ruling lack factual and legal basis. The European Commission disregarded the objective fact that China's electric vehicle advantages come from open competition, disregarded the rules of the World Trade Organization, disregarded the full cooperation of relevant Chinese companies in the relevant investigation, artificially constructed and exaggerated the so-called "subsidy" projects, abused the "available facts" rule, and ruled out abnormally high subsidies. This is a naked protectionist act, creating and escalating trade frictions, and "destroying fair competition" in the name of "maintaining fair competition". It is the greatest "unfairness". This move by the EU not only damages the legitimate rights and interests of China's electric vehicle industry, but will also disrupt and distort the global automotive industry chain supply chain, including the EU.
The European Commission is holding high the banner of green development in one hand and wielding the stick of "protectionism" in the other, politicizing and weaponizing economic and trade issues. This is not in line with the consensus reached by Chinese and European leaders on strengthening cooperation, and will affect the atmosphere of bilateral economic and trade cooperation between China and Europe, be detrimental to the interests of EU consumers themselves, and will also undermine the overall situation of the EU's own green transformation and global cooperation in addressing climate change.
China urges the EU to immediately correct its wrong practices, earnestly implement the important consensus reached at the recent trilateral meeting between the leaders of China, France and the EU, and properly handle economic and trade frictions through dialogue and consultation. China will closely follow the EU's subsequent progress and will resolutely take all necessary measures to firmly defend the legitimate rights and interests of Chinese companies.
EU Chamber of Commerce in China: The temporary tariff range of 17.4% to 38.1% means severe market access barriers
On June 12, the European Union Chamber of Commerce in China expressed great disappointment and strong dissatisfaction with the European Commission's insistence on taking trade protectionist actions despite the dissuasion of all parties.
Regarding the European Commission's plan to impose a temporary anti-subsidy tax of 17.4%-38.1% on electric vehicles originating in China starting in early July, the European Union Chamber of Commerce in China believes that this measure will not only seriously damage the legitimate rights and interests of Chinese and European automobile companies and automobile supply chain companies, distort the fair competition environment for Chinese electric vehicle companies in the European market, but will also impact the normal economic and trade exchanges between China and Europe in the automobile and related fields. Its "spillover effect" will bring challenges to China-EU economic and trade relations and bilateral relations. The European Union Chamber of Commerce in China expresses serious concern and worry about this.
According to a survey conducted by the European Union Chamber of Commerce in China, for most Chinese automakers, a tariff of more than 10% imposed by the EU is considered high, which will have a direct negative impact on their exports to Europe. The current temporary tariff range of 17.4% to 38.1% means severe market access barriers. China is the world's largest market for electric vehicle production and sales, with domestic sales far exceeding the total sales in the European and American markets. Electric vehicle exports to Europe only account for about 5% of China's electric vehicle production, and most of them are European and American brands. The market share of Chinese independent electric vehicle brands in the European market is also far lower than that of local European companies.
The European Chamber of Commerce in China reiterated that the EU's investigation into China's electric vehicles showed obvious signs of political manipulation and was highly unilateral and protectionist. The EU's investigation was not based on substantive complaints from the European industry. On the contrary, many European industry representatives expressed their concerns about the investigation on different occasions, believing that it would have a negative impact on Chinese and European companies in the fields of electric vehicle supply chain, innovative research and development, and market cooperation. The European Chamber of Commerce in China and Chinese companies in the automotive field share the same feelings.
The European Union Chamber of Commerce in China stressed that although Chinese companies do not recognize the original intention of the European investigation, they still fully cooperate with the European investigation process, make every effort to fill out questionnaires, and cooperate with the European side in the inspection of Chinese companies' factories and business premises in many places in China and Europe. At the same time, many companies and stakeholders reported that the European side abused its investigation power and took improper investigation actions in the investigation, including some investigation directions and fields that exceeded the scope of anti-subsidy investigations, and made unreasonable and beyond-the-scope requirements for companies to provide evidence, and did not provide companies and stakeholders with sufficient time to respond and provide evidence. In addition, many of the European side's "subsidy" accusations contain false elements and are suspected of being "witch hunts". At several hearings held in Brussels, Chinese companies and relevant parties questioned the problems that arose in the investigation, but the European side did not respond or correct its wrong practices, making the hearings meaningless. The European Union Chamber of Commerce in China deeply regrets and worries about this.
The European Union Chamber of Commerce in China also pointed out that the EU has not fully fulfilled the relevant requirements for transparency in the investigation. The relevant information on how the so-called subsidies have caused actual damage or threat of damage to EU industries is not public and transparent, which has led to strong doubts from all parties about the investigation methods, paths and results.
The European Union Chamber of Commerce in China has always believed that the advantages of China's electric vehicle industry lie in technological innovation and cost management. Through continuous technological iteration and fierce market competition, relying on China's overall supply chain advantages, it has developed strong market competitiveness, which will help to make electric vehicles, a green product and technology, a public product that is conducive to the global green transformation. The advantages of China's electric vehicle industry are by no means formed by relying on subsidies.
The European Union Chamber of Commerce in China also pointed out that in the field of green transformation such as new energy vehicles and responding to global climate change, the biggest challenge facing the world is not overcapacity, but insufficient capacity, high prices of green technology and products. The automobile industry is the "crown jewel" of European industry, and its global competitiveness is unmatched. In the process of its electrification transformation, normal market competition is conducive to stimulating industrial vitality. The innovative combination of the brand effect of European car companies and the complete supply chain system of Chinese electric vehicles will not only help European companies share the market opportunities and development opportunities in the field of green travel in the world's largest electric vehicle market, the Chinese market, but also help enhance the global competitiveness of local European automobile brands. At the same time, the localization strategy of Chinese companies in Europe and the training of labor talents are beneficial to Europe's creation of its own electric vehicle supply chain ecosystem.
The European Chamber of Commerce in China is concerned that the EU's insistence on advancing the investigation and imposing temporary anti-subsidy duties, a trade protectionist approach, may lead to an escalation of China-EU trade frictions and destabilize China-EU economic and trade relations. The Chamber of Commerce calls on China and the EU to jointly seek solutions through dialogue and consultation. Chinese electric vehicle and related companies still regard Europe as an important strategic market and are willing to continue to deepen their presence in the European market to help Europe and the world achieve the dual carbon goal vision and green transformation.
China Automobile Association: We deeply regret and firmly cannot accept this
On June 12, 2024, the European Commission, in its disclosure of information on the anti-subsidy investigation into Chinese electric vehicles, disregarded the facts and insisted that China's electric vehicle industry had high "subsidies", which had harmed the EU electric vehicle industry, and planned to impose temporary anti-subsidy duties on electric vehicles exported from China. The China Association of Automobile Manufacturers deeply regrets this and said it would resolutely not accept it.
Since the European Commission launched an anti-subsidy investigation on Chinese electric vehicles in October last year, the Chinese auto industry has actively cooperated with the investigation in order to maintain the overall security and stability of the China-EU auto industry chain, and relevant companies have carefully provided materials in accordance with the requirements of the investigation department. However, during the investigation, the European side preset the investigation results, tended to select sample companies, abused the investigation power, arbitrarily expanded the scope of the investigation, and seriously distorted the investigation results.
In recent years, China's new energy vehicle industry has developed rapidly and has attracted widespread attention from the world. Electric vehicle products are also popular among global consumers, including those in the European Union. China's electric vehicle exports not only provide a good consumer experience for local consumers, but also make positive contributions to the cultivation of the local electric vehicle market and industrial development.
Since China's reform and opening up, the Chinese and European automotive industries have been developing good cooperation for nearly 40 years, with deep integration of the industrial chain, forming a community of shared destiny of "you are in me, I am in you". In the new wave of global technological change, major Chinese and European automotive companies are conducting deeper cooperation in electrification, intelligence and networking, and jointly making positive contributions to promoting global automotive technological progress and green transformation.
We hope that the European Commission will not regard the current phased vehicle trade phenomenon that is necessary for the development of the industry as a long-term threat, let alone politicize economic and trade issues and abuse trade relief measures. It should avoid damaging and distorting the global automotive industry chain and supply chain, including the EU, and maintain a fair, non-discriminatory and predictable market environment. We hope that the EU automotive industry will think rationally and take positive actions to jointly maintain the current situation of reasonable competition, mutual benefit and win-win between the two sides, and jointly promote the healthy and sustainable development of the global automotive industry.
BMW Group Chairman Zipse: Imposing tariffs will hinder the development of European car companies
On June 12, BMW Group Chairman Zipse commented on the EU's tax increase: "The European Commission's imposition of tariffs on Chinese electric vehicles is a wrong decision. The imposition of tariffs will hinder the development of European automakers and will also harm Europe's own interests. Trade protectionism is bound to trigger a chain reaction: responding to tariffs with tariffs and replacing cooperation with isolation. For the BMW Group, protectionist measures such as increasing import tariffs cannot help companies improve their global competitiveness. The BMW Group is a firm supporter of free trade."
Mercedes-Benz Group: Free trade and fair competition will bring prosperity, growth and innovation to all parties
Mercedes-Benz Group stated: "We have taken note of the relevant temporary measures issued by the EU. Mercedes-Benz has always supported free trade based on WTO rules, including the principle that all market participants should enjoy equal treatment. Free trade and fair competition will bring prosperity, growth and innovation to all parties. If the trend of protectionism is allowed to rise, it will have negative consequences for all stakeholders. We will closely monitor developments. Please understand that we will not comment further on ongoing investigations."