Tariffs could come into force in November after a vote in late October.
ADVERTISEMENTEU capitals are prepared to back the introduction of tariffs on Chinese electric vehicles, Valdis Dombrovskis, the European commissioner for trade, told the Financial Times.
“It’s clear that member states realise the need to protect the EU’s car industry because this risk of injury is there,” said Dombrovskis.
“Chinese battery electric vehicle market share is growing very rapidly. That subsidisation is there.”
“So it’s certainly an issue that needs to be addressed.”
At the start of July, the European Union decided to impose provisional tariffs on EVs made in China, in the range of 17.4% to 37.6%.
That was on top of a 10% duty already imposed on Chinese auto imports.
Although the move sparked anger in Beijing, supporters of the levy claim it is essential to protect EU manufacturers against unfair competition.
A probe launched last year by the European Commission determined that Chinese subsidies were allowing firms to keep their prices artificially low.
China has rejected these claims, arguing that its industry has flourished naturally.
In June, Chinese brands occupied 11% of the European electric-car market, according to Dataforce.
Consequences of a tattered trade relationship
EU members will vote on more permanent tariff proposals in late October, which will be applied in November.
Dombrovskis told the FT he was willing to find “a mutually acceptable solution” to solve the import dispute, although it would necessitate a change in China’s subsidy policy.
“The EU market remains more open for Chinese goods and companies than the Chinese market is for the EU,” said Dombrovskis.
“So therefore we put a lot of focus on our discussions with our Chinese counterparts to address those various market access barriers, to ensure more reciprocal trade.”
Some EU states, particularly Germany, nonetheless fear that a pushback against Chinese imports could be harmful to European trade.
ADVERTISEMENTChina is a key market for German cars, meaning that industrial actors are reluctant to bite the hand that feeds them.
“China is the EU’s second biggest trading partner,” acknowledged Dombrovskis.
“And clearly we are interested in trade and investment in China. At the same time, it must be noted that our trade relationship is very unbalanced,” he said.
Germany could come round to tariffs
Other voices in Europe have underlined the importance of Chinese technology to the green transition.
ADVERTISEMENTShunning these imports will ultimately make products like solar panels and electric vehicles more expensive for European consumers.
Yet despite outwardly criticising tariffs, Germany didn’t vote against the measures in an advisory poll in July, instead choosing to abstain.
“Germany has taken part in the discussion without making a commitment,” German economy ministry spokesman Korbinian Wagner said.
“In the view of the German government, it is now crucial to seek a swift and amicable solution with China.”
ADVERTISEMENTNine others abstained from voting, four states were anti-tariffs, and 11 voted in favour.
In order to block the tariffs, votes from 15 countries representing 65% of the bloc’s population are needed.
How could China react?
How China could react to definitive tariffs is still unclear, although Beijing has already threatened to impose its own levies on EU goods like pork and spirits.
Some Chinese carmakers have also started to open plants in the EU to circumvent tariffs.
ADVERTISEMENTDombrovskis warned that, in order to avoid import fees, a minimum portion of manufacturing must take place in the EU.
The Commission’s stance is still milder than the position taken by the US government.
In May, President Joe Biden imposed a tariff of 100% on Chinese EV imports.
