EU presses ahead with Chinese EV tariffs after split vote

Brussels will stick to plans to impose hefty tariffs on China-made electric vehicles, the EU executive said on Friday, even after the bloc’s leading economy Germany rejected them and exposed a rift over its biggest trade row with Beijing in a decade.

The proposed duties on Chinese-built EVs of up to 45% would cost carmakers billions of extra dollars to bring cars into the bloc and are set to be imposed from next month for five years.

The Commission, which oversees the bloc’s trade policy, has said they would counter what it sees as unfair Chinese subsidies after a year-long anti-subsidy investigation, but it also said on Friday it would continue talks with Beijing.

A possible compromise could be to set minimum sales prices.

In a pivotal vote on Friday, 10 EU members backed tariffs and five voted against, with 12 abstentions, EU sources said.

It would have taken opposition from a qualified majority of 15 EU members, representing 65% of the EU population, to block the proposal. Reuters reported on Wednesday that the measure was likely to pass with France, Italy and Poland planning to vote in favour.

The region’s biggest economy and major car producer, Germany, voted against the proposal, sources said on Friday.

The EU executive said it had obtained “the necessary support” to adopt the tariffs, although it would continue talks with Beijing to find an alternative solution.

Friday’s vote reflected divisions in Europe on commercial relations with China. Some nations want a firm line against what they see as excessive state subsidies and are mindful of the EU’s failure to impose tariffs on Chinese solar panels a decade ago. China has a share of over 90% of the EU photovoltaic market.

Other countries want to encourage Chinese investment or fear a tit-for-tat trade war.

In what was already seen as a retaliation, Beijing this year launched its own probes into imports of EU brandy, dairy and pork products.