BRUSSELS — The European Commission said on Friday it had received enough support from E.U. members to impose tariffs of up to 45% on Chinese electric vehicle imports in the bloc’s highest profile trade case, but would continue to negotiate with Beijing.
The Commission, which oversees the bloc’s trade policy, has proposed final duties on Chinese-built EVs for the next five years to counter what it sees as unfair Chinese subsidies after a year-long anti-subsidy investigation.
In a vote on Friday, 10 E.U. members backed tariffs and five voted against, with 12 abstentions, E.U. sources said.
It would have taken opposition from a qualified majority of 15 E.U. members, representing 65% of the E.U. population, to block the proposal. Reuters reported on Wednesday that the measure was likely to pass with France, Italy and Poland planning to vote in favor.
The E.U. executive said it had obtained “the necessary support” to adopt the tariffs, although it would continue talks with Beijing to find an alternative solution.
The region’s biggest economy and major car producer, Germany, voted against the proposal, sources said on Friday.
BMW Chief Executive Oliver Zipse described the vote as “a fatal signal for the European automotive industry”. He said a quick settlement was needed between Brussels and Beijing to prevent a trade conflict.
Volkswagen said the planned tariffs were “the wrong approach.”
China’s foreign ministry did not immediately respond to a Reuters request for comment.
Stellantis said it supported free and fair competition and that the sector was under pressure from ambitious carbon reduction plans and “the Chinese global commercial offensive.”
Hungarian Prime Minister Viktor Orban said on Friday that the E.U. was headed for an “economic cold war” with China.
The E.U.’s stance towards Beijing has hardened in the last five years. It views China as a potential partner in some issues, but also as a competitor and a systemic rival.
In moves seen as a retaliation, Beijing this year launched its own probes into imports of E.U. brandy, dairy and pork products.
The Commission says China’s spare production capacity of three million EVs per year, which needed to be exported, is twice the size of the E.U. market. Given 100% tariffs in the United States and Canada, the most obvious outlet for those EVs is Europe.
The E.U. executive has said it is willing to continue negotiating an alternative to tariffs with China and could re-examine a price undertaking — involving a minimum import price and typically a volume cap — having previously rejected those offered by Chinese companies.
The tariffs range from 7.8% for Tesla TSLA.O to 35.3% for SAIC 600104.SS and other companies deemed not to have cooperated with the E.U. investigation. These tariffs are on top of the EU’s standard 10% import duty for cars.
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