Chinese Trade Retaliation Fear as Europe Enacts Tariffs on Imported BEVs

China has rejected the European Union’s tariffs on imports of its battery-electric vehicles and files a lawsuit under the World Trade Organization’s dispute procedure against the moves.

Many of its automakers, including state-owned Chinese brands SAIC and GAC, have not cooperated with investigators from Europe’s trade body, the European Commission, looking at unfair government subsidies and will now face punitive tariffs of up 45.3%.

However, as WardsAuto heard from GAC executives visiting the Paris Motor Show 2024, the loss-making automaker seems unworried by the level of tariffs and is confident it will still be able to undercut legacy automakers in the European market.

So, it’s likely that the Chinese BEV invasion of European markets will advance and offer consumers cheaper vehicles than domestic automakers can field.

Nonetheless, there is still the risk that EU products imported into China may be victim of retaliatory tariffs if the communist state feels sufficiently aggrieved, risking the trading bloc’s €739 billion ($798 billion) in bilateral merchandise trade seen last year.

Tariffs are set to remain in place for the next five years unless a review is initiated with China, the EU says in its Official Journal. An accompanying press release describes the move as protection for the 27-nation group against the “rapid rise in low-priced exports of EVs” from China, Nikkei Asia reports.

While announcing the WTO filing, a spokesperson for China’s Ministry of Commerce says it disapproves of and rejects the EU move, claiming the anti-subsidy investigation of Chinese EVs is unreasonable and non-compliant, and is a protectionist practice in the name of “fair competition,” reports Bastille Post Global.

The spokesperson adds that China will “continue to take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.”