China Vows To 'Firmly Safeguard' Interests Against New EU Tariffs As EV Makers, Experts Give Mixed Reactions

Ahead of the potential imposition of tariffs by the European Union on Chinese electric vehicles (EVs), China has announced its intention to protect its interests.

China said it will take all necessary steps to defend its rights after a report indicated that the European Commission plans to impose tariffs of up to 25% on imported Chinese electric vehicles (EVs), according to Reuters on Wednesday.

Starting next month, the European Commission intends to apply provisional duties of up to 25% on Chinese EV imports. This move aims to counteract subsidies provided by the Chinese government to its manufacturers.

The tariffs could escalate to around 35%, which is still significantly lower than the 100% duties imposed by the U.S., Financial Times reported. The decision is part of the EU’s strategy to address concerns over Chinese industrial overcapacity flooding the market with low-cost products.

Lin Jian, a spokesperson for China’s foreign ministry, labeled the investigation as “a typical case of protectionism.”

“We urge the EU to abide by its commitment to support free trade and oppose protectionism, and work with China to safeguard the overall situation of China-EU economic and trade cooperation,” he said.

“China will take all necessary measures to firmly safeguard its legitimate rights and interests.”

Companies like BYD Co BYDDF, SAIC, and Tesla Inc. TSLA, which manufactures in China, will be impacted by these tariffs.

Volkswagen VWAGY voiced concerns that the timing of the decision could further dampen the already weak demand for Battery Electric Vehicles (BEVs) in Europe.

Stellantis STLA championed the cause of free and fair competition, stating that the company remains flexible and will adjust to the new tariff landscape. Mercedes Benz MBGAF CEO, Ola Kaellenius, urged for the elimination of trade barriers in accordance with the World Trade Organisation’s principles.

Chinese EV maker, NIO NIO, facing a 21% tariff, criticized the strategy, arguing it hampers global trade of electric vehicles and impedes global environmental protection. However, NIO reiterated its commitment to the European EV market.

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Industry experts and research firms have raised concerns about the tariffs’ impact on European car buyers and manufacturers. Some speculate that the tariffs could trigger retaliatory measures from the Chinese government, while others believe Chinese manufacturers could offset these tariffs within their profit margins.

Despite the backlash, some support the decision. Julia Poliscanova from the European environmental group Transport & Environment endorsed the tariffs, highlighting the need for a robust industrial policy to accelerate electrification and localize manufacturing.

Markus Ferber, a German Member of the European Parliament, also backed the decision, asserting that the EU needs to counter Chinese dumping practices to foster a competitive EV industry.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari