Chinese Companies, Tesla, And BMW Are Suing The EU Over Tariffs

Tesla, BMW, and Chinese companies SAIC, Geely, and BYD are contesting the EU’s extra customs duties on electric car imports from China by filing a lawsuit in the European Court of Justice.

Since late October, the European Commission has added an extra tariff of up to 35 percent, alongside the existing 10 percent tariff on battery-powered vehicles produced in China. China has lodged a complaint with the World Trade Organization (WTO) against what it views as a protectionist measure. Furthermore, China has initiated anti-dumping investigations into certain EU imports such as pork, dairy, and alcoholic beverages.

The EU states that the purpose of the additional tariff is to level the playing field for its manufacturers, who face unfair advantages due to Chinese state subsidies. This move aims to protect the European automotive industry, which employs 14 million people, from these practices that have been under scrutiny by the European Commission for some time.

EU Tariffs A Response To US Stricter Measures

The EU’s tariffs are a response to stricter US measures, which impose a 100 percent tariff on all electric vehicles imported from China. Notably, prominent German manufacturers like BMW produce many models in China, some of which they import to the EU. Meanwhile, American manufacturer Tesla assembles its popular “Model 3” in Shanghai for export to Europe.

The level of European tariffs varies depending on the estimated percentage of subsidies that manufacturers received in China: from 7.8 percent for Tesla vehicles produced in Shanghai, over 17 percent for BYD, 18.8 percent for Geely and 35.3 percent for SAIC vehicles.

Other producers who cooperated in the EU investigation received an additional duty of 20.7 percent, and those who did not received a 35.3 percent duty.

The market share of Chinese electric cars in the EU jumped from less than two percent in 2020 to more than 14 percent in the second quarter of last year, the EU says.

• Also See: Drop High Tariffs On China EVs, Welcome Chinese Car Plants In Europe, Mercedes Chief Tells EU