What is expected to happen after the European Union's investigations into electric cars made in China?

2024-10-04 21:56:28, Kosova & Bota CNA

What is expected to happen after the European Union's investigations into

The European Commission announced on Friday that starting at the end of October it will apply tariffs to electric cars made in China after a vote that split the bloc's member states in two.

The commission imposed tariffs ranging from 7.8 percent on Tesla-branded cars to 35.3 percent on SAIC-branded cars and those of other manufacturers deemed to have failed to cooperate with European Union anti-subsidy investigations. These are additional charges on top of the standard EU customs duty on cars of 10 percent.

The proposal of the European Commission was approved with only 10 votes in favor, 5 countries voted against and 12 abstained.

The proposal would have been rejected if 15 member states, representing 65 percent of the EU's population, had voted against it.

The commission could also have amended the proposal to secure wider support, but decided not to, saying it had secured sufficient support.

The new rates start to apply on October 31 and will be in effect for 5 years.

The European Commission said it is ready to continue negotiating an alternative solution to the tariffs with China even after their implementation begins.

The EU's executive arm said last month it may re-examine trade deals with Chinese companies that would include a minimum price for Chinese cars as well as determine the total amount of their imports. In the past, the Commission has rejected offers from Chinese companies.

One option currently being negotiated is a scheme of minimum import prices calculated on the basis of several criteria such as range, battery life and size of the electric car, along with other specifications such as 2-wheel drive or four-wheel drive, a source said. who has knowledge on this matter.

The commission has said that whatever alternative is offered must comply with World Trade Organization rules.

In a move seen as a sign of retaliation, China has launched its own investigations into EU exports of pork and alcohol and has launched an investigation into EU dairy subsidies, but has yet to announce any measure.

The EU complained about China's investigations into dairy products at the World Trade Organization last week.

China's Ministry of Commerce has also met with carmakers' associations and industry representatives to discuss increasing customs duties on large-caliber fuel vehicles, a measure that would hit German carmakers the hardest.

Exports of cars with engines above 2.5 liters from Germany to China last year reached $1.2 billion, according to data from Chinese customs.

What is expected to happen after the investigation?

Companies not included in the groups 'BYD 002594.SZ', 'Geely GEELY.UL' and 'SAIC 600104.SS' that wish to have their own customs duty must request an "expedited review" immediately after the implementation begins of new tariffs. Such review shall not last more than nine months.

The commission can also do an "interim review" after a year, if the measures are no longer necessary, or if they are not sufficient to counter the subsidies.

The commission often looks into whether manufacturers are avoiding customs duties by exporting parts by having cars assembled in a third country. For the EU, such avoidance occurs if over 60 percent of the value of the parts are imported from a country which has a customs duty and if the value added during assembly does not exceed 25 percent of the total value.

Companies can appeal these measures to the European Court of Justice. China has already turned to the World Trade Organization. Both legal routes can take over a year.

The Commission is convinced that the investigation and the new tariffs are in accordance with the rules of the World Trade Organization./ VOA