EU Follows Suit with Duties Against Chinese EVs

Tweet

Oct. 11, 2024
By: Hannah B. Kreinik

In June the European Union (“EU”) proposed countervailing tariffs against Chinese electric vehicles (“EVs”). Now the tariffs are expected to be finalized by October 30^th, although discussions between China and the EU will continue on the issue (please see the European Union’s Commission statement here and the original announcement of the duties here). The U.S. proposed similar increased duties against Chinese EVs earlier this year in a chain of actions against China’s dominance of the EV sector (see our articles on this issue here and here).

The new tariffs will potentially impose duties up to 38.1% according to the EU Commission for certain Chinese electric vehicles. The EU Commission also stated that the increased tariffs would be on top of the 10% duties against Chinese EVs already in place. China has already responded with a threat to take the EU to a dispute panel in the World Trade Organization (“WTO”). China has also made a similar response in the WTO to U.S. tariff actions against Chinese EVs.

This most recent action from the EU is not surprising for several reasons. First, the EU has several members with very significant automotive industries. While Germany, Italy, and France all immediately come to mind, component production and assembly operations are spread throughout the EU.

Second, the EU and US have been working together on different issues to align their trade policies (see a similar action here on certain metals and here on forced labor).

In addition, both the U.S. and EU, as well as other international organizations, are attempting to come together on issues of green trade, sustainable energy, and artificial intelligence (see previous White House statement on the issue here).

Importers should be aware of these practices to coordinate trade policy, as there is growing potential that actions taken on trade by the U.S. or EU may create a domino effect and cause supply chain disruptions globally. In addition, with two very large economic blocs taking such action against Chinese EVs the likelihood of similar action being used to prevent surges in other regions in the future.

Barnes, Richardson & Colburn attorneys are here to support importers with playing the international trade field and synchronizing their supply chains respectively.