EU Springs Forward with Countervailing Duties on Chinese EV Batteries

Oct. 30, 2024
By: Hannah B. Kreinik

The EU has decided to proceed with countervailing duties against Chinese electric vehicle (EV) batteries, which take effect today. Global action against the Chinese monopoly of EV batteries and battery components continues, now with a regional bloc pushing increased tariffs as well as similar tariffs from the US, Canada, and Türkiye. The takeover of the Chinese EV battery industry is nothing new, and the EU previously announced possible tariffs against Chinese batteries earlier this month followed by threats from the Chinese of retaliatory actions (see our article on the topic here).

Now, the EU is imposing an increase of 17 to 35% on certain Chinese batteries, on top of the EU’s prior 10% tariffs on Chinese automobiles. The new duties are set to continue for five years. China has already acted against the new tariffs by launching a challenge against the trade remedies at the World Trade Organization (WTO). In addition, China has also added tariffs against EU brandy and has started investigations on EU pork and dairy products. The EU is responding with threats to take the brandy duties to the WTO as well. Even with all this back and forth, the two nations are still trying to come to an agreement on the issues that promote fair and healthy trade practices.

Importers should be aware that there seems to be no end in sight for the Chinese EV battery battle. This means that importers will continue to face challenges in EV battery and auto supply chains, with a potential shift from Chinese production to North, Central, and South American or European production (see our previous article on the issue here and here). In addition, importers should keep in mind that the Chinese auto sector is no longer a safe bet due to Chinese EV control but also national security threats from the region (see our article on it here). As such, investment in the area should be avoided (see our article on investment in China here).

Barnes, Richardson & Colburn attorneys are available to help your company sort out any auto supply chain complications.