The EU imposes a punitive duty of up to almost 40 percent on Chinese electric cars

European the union imposes a punitive duty of up to 37.6 percent on Chinese electric cars. The tariffs will take effect from Friday.

The tariffs are based on subsidies received by Chinese car manufacturers, which the EU considers unfair.

However, the new punitive tariffs are still temporary for another four months. News agency Reuters according to China and the EU are expected to continue discussions around customs during this period.

So far, temporary duties are at a level of 17.4–37.6 percent. The level of customs duties is almost exactly the same as in the Commission’s preliminary decision on the imposition of customs duties, which was announced in mid-June.

At the time, the commission said that Chinese electric cars would be subject to punitive tariffs of 17 to 38 percent, depending on the brand, if the car is imported into Europe after the date the tariffs come into effect. The new punitive duty comes on top of the current 10 percent import duty.

There are no retroactive duties for cars already imported to Europe in the EU’s decision.

Customs are temporary for the time being, giving the EU more time to investigate whether China’s state subsidies to electric car companies have been unfair.

The temporary duties can be valid for a maximum of four months, after which the EU must decide whether to make the punitive duties permanent.

In the case of Chinese electric cars, that date would be November 2, according to Reuters. Possible permanent tariffs would be valid for five years, according to the EU Commission’s press release.

According to Reuters, the temporary tariffs will only be collected if the EU imposes permanent punitive tariffs on Chinese electric cars at the end of its investigation.

If no permanent duties are imposed, or if they are lower than the temporary duties, the temporary duties will also be revised downwards accordingly. Until now, customs authorities only required car importers to provide a bank guarantee for customs fees, Reuters reports.

Commission the bulletin details three Chinese electric car manufacturers, for which the decision has set their own additional duty levels.

Of these, perhaps the most well-known car brand in Finland is Byd, which rushed to the European market, and whose additional duty is temporarily 17.4 percent. Car manufacturer Geely’s new duty is 19.9 percent at this stage, and SAIC’s is the strictest 37.6 percent.

Byd and Geely are at least nominally private companies, but SAIC is state-owned.

According to the commission, other car brands that have cooperated with the EU investigation and manufacture their electric cars in China will shoulder a 20.8 percent duty. For companies that refused to cooperate, the new duty is the strictest 37.6 percent.

According to the Commission’s press release, in addition to this, the US electric car giant Tesla can receive a separately calculated tariff level if the punitive tariffs are made permanent.

Tesla on Reuters according to the largest company that imports electric cars from China to Europe, and would like its tariff level to be lower than the general level of 20.8 percent, which is set for the company’s cars in the temporary phase of tariffs.

China has threatened to respond to punitive tariffs with its own restrictions on European products. China already opened in June the so-called anti-dumping investigation against pork imported from the territory of the European Union.

The investigation paves the way for China to impose punitive tariffs on pork coming from the EU. Possible import restrictions may also apply to Finnish butchers.

News agency Bloomberg’s according to China has threatened that, in addition to agricultural products, it could take over, for example, European aviation products and large-engine cars. According to the news agency, it may also challenge the EU’s decision at the World Trade Organization (WTO).

“We see no basis for countermeasures, as our actions are in line with WTO rules”, EU Trade Commissioner Valdis Dombrovskis told Bloomberg.