European Union countries on Friday cleared the way for additional tariffs of up to 35.3% on battery-powered electric vehicles imported from China, EU diplomats told dpa.
The European Commission had announced the additional tariffs after an investigation accused Beijing of subsidizing domestic electric car manufacturers and thus distorting the EU market.
The tariffs will apply for five years, on top of the standard 10% import duty on EU cars.
Whether the import tariffs, which are likely to worsen tensions between the EU and its largest trading partner, will come into effect in early November now depends on the commission.
The plans, which caused uproar in EU capitals and among car manufacturers, could still be rejected if Brussels reaches a solution with China at the negotiating table.
In a statement after the vote, the commission said that “the EU and China continue to work hard to explore an alternative solution.”
However, this solution should be fully compatible with World Trade Organization rules, adequate, verifiable and enforceable, the committee said.
To stop the new tariffs, at least 15 of the 27 country delegates, representing 65% of the EU population, would have had to vote against the tariffs.
However, only five countries representing around 23% of the EU population did so, while 10 countries voted in favor and 12 abstained, EU diplomats told dpa.
Berlin, which voted against the measure, repeatedly called for further talks with Beijing amid concerns over retaliation that could damage the country’s major auto industry.
After the vote, German Finance Minister Christian Lindner warned of an escalation in trade policy disputes, claiming in a post on “We need a negotiated solution,” he wrote.
German carmakers, including brands such as Volkswagen, BMW and Mercedes, generally opposed the tariffs because they have invested in the Chinese market and rely heavily on sales there.
VW and BMW both called for a resolution after the vote to avoid a trade dispute.
“We call on the European Commission and the Chinese government to constructively continue the ongoing negotiations on a political solution,” VW said in a press release. “The common goal should be to prevent protective tariffs and thus avoid a trade conflict.”
“The planned tariffs are the wrong approach and would not improve the competitive position of the European car industry,” VW added.
BMW warned of negative consequences. “Today’s vote is a fatal signal for the European car industry,” said company boss Oliver Zipse. “Now a quick solution is needed between the European Commission and China to avoid a trade conflict that will ultimately have only losers.”
The German Automotive Industry Association (VDA) also warned of negative effects, with VDA chairman Hildegard Müller saying in a statement that this was “another step away from global cooperation”. She claimed that the potential harm would therefore outweigh the potential benefit of the instrument.
Müller called on both sides to avoid an escalation through negotiations, adding: “Ideally, avoid tariffs to avoid the risk of a trade conflict.”
She said solutions must be found through constructive conversations. Both sides, China and the European Union, she asserted, should approach each other.
Ultimately, Germany was unable to make good on its position because other major EU countries had expressed support for the tariffs ahead of the vote.
French President Emmanuel Macron was among those who expressed support for punitive measures against Chinese e-cars. The Italian government had said it was in favor of the tariffs.
European carmakers have struggled to substantially increase their sales of battery-powered cars, with Chinese electric cars on average 20% cheaper than EU models, according to the commission.
Advocacy group Transport & Environment said on Friday that the potential new tariffs must be combined with stricter emissions targets to successfully increase sales of European-made electric vehicles.
Stricter CO2 limits for vehicles will come into effect in the EU in 2025.
However, some carmakers have called for a postponement of the new limits to instead boost sales of the most profitable combustion engine vehicles, T&E writes.
