Punitive tariffs are set to be imposed on Chinese electric cars in July, according to a report by the Financial Times. This move has the potential to spark a trade war between the EU and China. The EU is said to be imposing punitive tariffs of 25 percent on Chinese electric cars, which will come into effect temporarily in July. Member states of the Union must vote on permanent tariffs by November, and the sanctions are expected to last for five years.
The decision to impose these tariffs comes after an investigation initiated by the EU Commission last fall, which found that the Chinese government’s support for electric car production was distorting competition. Currently, imported cars to the EU face a ten percent tariff, but if the proposed punitive tariffs are implemented, Chinese electric car manufacturers could be paying around 5,000 euros per car.
It is still unclear whether these tariffs will result in increased car prices for consumers. The decision is expected to cause significant disruptions in the automotive industry and may lead to retaliatory measures from China. While countries like France support the tariffs to protect European car manufacturers, others like Germany, Sweden, and Hungary are opposed due to their economic ties with China.
In addition to the EU’s actions, the US has also announced a 100 percent tariff on Chinese cars and battery materials. This trend of escalating trade tensions could have global implications and further impact the automotive industry. The consequences of these decisions are being closely watched across the world, as they have the potential to spark wider trade conflicts.