
BRUSSELS (AP) โ 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 โ which has forced the undercutting of EU industry prices โ and Beijingโs 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 โthe injurious subsidizationโ by China, and be โmonitorable and enforceable.โ
Beijing opposes the duties. โChina firmly opposes the EUโs unfair, non-compliant and unreasonable protectionist practices in this case, and firmly opposes the EUโs imposition of anti-subsidy duties on Chinese electric vehicles,โ a spokesperson at Chinaโs 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 Chinaโs state-owned SAIC. Geely has brands including Polestar and Swedenโs Volvo, while SAIC owns Britainโs MG, one of Europeโs 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 โindividually calculatedโ rate for Tesla of 7.8%.
The retaliatory duties have run into opposition in Germany, which has Europeโs biggest economy and is home to major automakers.
Germanyโs auto industry association, the VDA, said the German government sent the โright signalโ by voting against them. Hildegard Mรผller, who chairs the group, called the decision โa further step away from global cooperation.โ
She acknowledged that there is a need for negotiations with China and said that they โmust prevent an escalation โ ideally avert the tariffs, so that we donโt risk a trade conflict.โ
Hungarian Prime Minister Viktor Orbรกn warned that the EU risks starting an โeconomic cold warโ with China, and he pledged to vote against the duties. โThis is the worst thing that can happen to Europe. ... If this continues, the European economy will die,โ 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 EUโs 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.