EU Set to Raise Tariffs on Chinese EVs this Week

EU Set to Raise Tariffs on Chinese EVs this Week

Anya Zhang
2 min read

EU Plans to Increase Tariffs on Chinese Electric Vehicles

The European Union is preparing to announce a surge in tariff rates for Chinese electric vehicles, potentially raising the current 10% duty to a range of 25-30%, with a possibility of reaching as high as 50%. This decision comes as the EU investigates the impact of Chinese subsidies on its own EV market, perceiving these imports as a significant threat. Notwithstanding the potential tariffs, experts such as Anthony Sassine from KraneShares believe that Chinese manufacturers will maintain their competitiveness due to their efficiency and advanced technology. Meanwhile, Chinese EV companies like BYD and Nio are making strides into the European market by establishing facilities and showrooms, indicating a strategic approach to circumvent these impending tariffs. This move echoes protectionist measures taken by the U.S., which increased tariffs on Chinese EVs to 100% earlier this year, and Turkey, which imposed an additional 40% tariff on Chinese vehicles.

Key Takeaways

  • The EU is expected to elevate tariffs on Chinese EVs to 25-30%, with a potential escalation to 50%.
  • Chinese EV manufacturers are anticipated to sustain their competitiveness despite the looming tariff increases.
  • The growth of China's EV industry is fueled by government incentives, leading to overcapacity concerns in the U.S. and Europe.
  • The U.S. raised tariffs on Chinese EV imports to 100% due to concerns about market saturation.
  • Chinese EV makers are expanding within Europe, establishing factories to bypass tariffs.


The EU's proposed tariff hike on Chinese EVs aims to shield domestic markets from perceived overcapacity resulting from Chinese subsidies, which has the potential to escalate trade tensions and trigger retaliatory measures. The technological superiority and efficiency of Chinese EV manufacturers may enable them to sustain their competitiveness despite the tariffs. Long-term strategies may involve localizing production in Europe to circumvent tariffs, similar to the approaches adopted by the U.S. and Turkey. This could lead to a localized EV supply chain in Europe, influencing local economies and employment. Conversely, higher tariffs might temporarily impede Chinese market penetration, thereby giving EU manufacturers a competitive edge.

Did You Know?

  • Tariff Rates: These are taxes imposed on imports to raise revenue and protect domestic industries by making foreign goods more expensive. In this context, the EU is considering increasing tariffs on Chinese electric vehicles (EVs) to safeguard its domestic EV market from perceived threats due to Chinese subsidies and overcapacity.
  • Protectionist Measures: These are policies designed to restrict trade between countries to protect or favor domestic industries. The potential increase in tariffs on Chinese EVs by the EU is a form of protectionist measure aimed at safeguarding its domestic EV market from foreign competition, particularly from Chinese manufacturers who benefit from government subsidies.
  • Overcapacity: This term refers to a situation where the production output of an industry exceeds the market demand. In the EV industry context, overcapacity can lead to market saturation and reduced prices, posing a threat to domestic industries in countries like the U.S. and Europe. Concerns over Chinese EV overcapacity are prompting countries to impose higher tariffs to safeguard their own markets.

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