EU tariffs hit Chinese electric car sales, spark trade tension

At the end of October, the European Union decided to increase import tariffs on electric cars from China. This decision affected the sales results of Chinese manufacturers in November, which were the lowest in eight months. Companies like BYD and SAIC Motor, owners of the MG brand, reported a market share drop to 7.4% from 8.2% in October.

The European Union imposed import tariffs on Chinese electric cars to protect its producers from subsidized competition from China. The new tariffs, up to 35.3%, prompted Chinese manufacturers to file a complaint with the World Trade Organization, accusing the EU of unfair practices.

The new tariffs, ranging from 7.8% to 35.3%, were imposed in response to China's subsidizing of production, which enables the sale of cars at reduced prices. The tariff rates depend on the degree of subsidization and cooperation with the European Commission. In response to these actions, China launched its own investigation into European products such as dairy and pork.

The increased tariffs might cause Europe more losses than benefits. While they aim to protect the local industry, Europe imports nearly half of its electric vehicles from China, which could hinder achieving ambitious climate goals. This poses a particular challenge for countries where the electric car market is still developing and the infrastructure has been insufficient so far.

Despite introducing higher tariffs, Europe remains a key market for Chinese electric cars, constituting about 40% of China's exports. The EU's decisions aim to protect European producers from what they consider unfair competition from Chinese companies.

Beijing's response to Brussels' decisions was swift and decisive. China views the new tariffs as an act of provocation and responded with anti-dumping proceedings against European products, which could lead to further escalation of the trade conflict.