EU governments face pivotal vote today for imposing Chinese EV tariffs

European Union members face a pivotal vote on Friday on whether to impose tariffs of up to 45 per cent on imports of Chinese-made electric vehicles in the bloc's highest profile trade case, which risks retaliation from Beijing.
 

The European Commission, which oversees the bloc's trade policy, proposed final duties for the next five years to counter what it sees as unfair Chinese subsidies after a year-long anti-subsidy investigation.
 

The EU's proposal can be blocked if a qualified majority of 15 EU members, representing 65 per cent of the EU population, vote against it. But that is a high hurdle.
 

 

Reuters reported on Wednesday that France, Greece, Italy and Poland would vote in favour, enough to avert a blocking majority against tariffs.
 

In the absence of a qualified majority either way, the EU executive can adopt the tariffs. However, it could also submit an amended proposal if it wanted to secure greater backing.
 

The region's top economy and major car producer, Germany, will vote against the introduction of tariffs, people with knowledge of the matter told Reuters late on Thursday. It had abstained in the first non-binding vote on the proposal in July.
 

German carmakers, for which China represents almost a third of their sales, have been particularly vocal against tariffs.
 

Volkswagen said they were "the wrong approach".

Sweden to abstain in vote on EU tariffs on Chinese electric vehicles
Sweden will abstain in a vote on the introduction of European Union tariffs on Chinese electric vehicles, the country's minister for foreign trade told Reuters on Friday.
 

Benjamin Dousa said that Sweden had considered voting against the tariffs but decided to abstain after discussions with the Commission.
 

"We have had very positive signals just recently from the Commission that they hopefully could go ahead with individual solutions for the auto industry and for Volvo Cars specifically," he said.
 

"Sweden's line is that the best thing would be that China and the EU together can come to an agreement in relation to this problem."
 

Sweden abstained in a first non-binding vote in July on the European Commission's proposal to impose the tariffs.

Reuters reported on Wednesday that France, Greece, Italy and Poland will vote in favour, which would be enough to push through the EU's highest profile trade measures.
 

The Commission's proposal can be implemented unless a qualified majority of 15 EU members, representing 65% of the EU population, vote against it in what is a very high hurdle.
 

Other EU members

The economy minister in Spain, a previous tariff backer, also said in a letter to European Commission Vice President Valdis Dombrovskis, seen by Reuters on Thursday, that instead of imposing tariffs, the EU should "keep negotiations open...

beyond the binding vote" to strike a deal on prices as well as the relocation of battery production to the bloc.
 

Spanish Prime Minister Pedro Sanchez had already said on a visit to China that the EU should reconsider its position.

Some EU members are nervous about Beijing's response. In moves seen as a retaliation, Beijing this year launched its own probes into imports of EU brandy, dairy and pork products.
 

Hungarian Prime Minister Viktor Orban warned on Friday that the EU was headed for an "economic cold war" with China However, the EU's stance towards Beijing has hardened in the past five years, now viewing China as a potential partner in some issues, but also as a competitor and a systemic rival.

The Commission says China's spare production capacity of three million EVs per year, which needed to be exported, is twice the size of the EU market. Given 100 per cent tariffs in the United States and Canada, the most obvious outlet for those EVs is Europe.
 

The EU executive has said it is willing to continue negotiating an alternative to tariffs with China and could re-examine a price undertaking - involving a minimum import price and typically a volume cap - having previously rejected those offered by Chinese companies.
 

One option under negotiation is minimum import prices calculated using criteria such as the range, battery performance and length of the EV, along with whether it is two- or four-wheel drive, a source familiar with the matter said.
 

The tariffs range from 7.8 per cent for Tesla to 35.3 per cent for SAIC and other companies deemed not to have cooperated with the EU investigation. These tariffs are on top of the EU's standard 10 per cent import duty for cars.
 

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