EU To Impose Countervailing Duties Of Up To 38.1% On Chinese BEVs

(RTTNews) - The European Commission is set to impose countervailing duties of up to 38.1 percent on imports of battery electric vehicles (BEVs) from China. The Commission has provisionally concluded that the BEV value chain in China benefits from unfair subsidization as part of its ongoing investigation.

The unfair subsidization is causing a threat of economic injury to BEV producers in the European Union, the Commission said.

The Commission had formally initiated an ex-officio anti-subsidy investigation on imports of BEVs originating in China. The investigation that began on October 4, 2023 is to be concluded within a maximum of 13 months on initiation, which will be by November 4, 2024.

The Commission has now pre-disclosed the level of provisional countervailing duties it would impose on imports of BEVs from China, which is to be done within 9 months after initiation of investigations, which will be by July 4, 2024.

The individual duties the Commission would apply to the three sampled Chinese producers would be 17.4 percent on BYD BEVs, 20 percent on Geely BEVs and 38.1 percent on SAIC BEVs.

Other BEV producers in China, which cooperated in the investigation but have not been sampled, will pay weighted average duty of 21 percent. Meanwhile, those who did not cooperate in the investigation would be charged residual duty of 38.1 percent.

These duties are to be imposed within 4 months after imposition of the provisional duties. The Commission has now reached out to Chinese authorities to discuss these findings and explore possible ways to resolve the issues identified in a WTO-compatible manner.

However, should discussions with Chinese authorities not lead to an effective solution, these provisional countervailing duties would be introduced from July 4, 2024. The duties would be collected only if and when definitive duties are imposed, which will be before November 4, 2024.

US-based EV maker Tesla, a BEV producer in China, may receive an individually calculated duty rate following a special request made by the company. The Commission said any other company producing BEVs in China can also request for an accelerated review to fix their duties.

The pre-disclosure of provisional countervailing duties has been sent to all interested parties, including the Government of China and Chinese companies, and to EU Member States. The pre-disclosure is aimed at informing the market at large about the forthcoming imposition of measures.

These duties will be added on top of the ordinary import duty of 10 percent. The aim of imposing these duties will ensure that EU and Chinese industries compete on a level playing field, and not to close the EU market to such imports.

The entire BEV value chain is heavily subsidized in China, and imports of Chinese BEVs presented a threat of clearly foreseeable and imminent injury to EU industry.