New tariffs on electric car imports from China hit BMW and Dacia with 21% duties

German car industry association VDA and government ministers criticized the EU's tentative tariffs on Chinese-made electric cars announced yesterday (June 12), which will also affect European companies that manufacture in China, such as BMW and Dacia.

The European Commission has announced preliminary duties on imported Chinese electric cars, known as "countervailing duties", which will range from 17% to 38%. The decision came in response to Chinese subsidies to the electric vehicle supply chain, which the EC says distort the prices of Chinese-made EVs, reports Euractiv.

The VDA, which represents carmakers such as Volkswagen, BMW and Daimler, strongly criticized the decision, with association president Hildegard Müller warning that it was a "step away from global cooperation".

"This measure further increases the risk of a global trade conflict," she added.

European car manufacturers producing electric vehicles in China will also be affected. For example, BMW and Dacia will face import duties of 21%. The rate is even higher than that for Chinese carmaker BYD, which will face a lower tariff of 17,4% as it took part in a Commission-led investigation and provided evidence that it benefited from less state support.

US carmaker Tesla will also have to pay a 21% duty on its models made in China, but has applied for a reduced rate, while other carmakers have yet to do so.

Any new tariffs come on top of the 10% duty the EU already applies to imported electric vehicles.

The European car manufacturers' association ACEA, whose members have more diverse interests, said only that they were "taking note" of the decision.

The German government insists on negotiations

German Transport Minister Volker Wiesing was quick to announce on social media that "the European Commission's punitive tariffs affect German companies and their top products".

"Vehicles must become cheaper through more competition, open markets and significantly better business conditions in the EU, not through trade wars and market fragmentation," he adds.

Similar statements were made by Economy Minister Robert Habeck, who told German media that "tariffs are always only a last resort as a political measure and are often the worst option."

"It is crucial to have talks now," he added, calling for talks between the EU and China.

China had to deal with climate change

German companies are also worried about potential retaliation from China, with Volker Treier of the DIHK business chamber warning that

"the tariffs announced by the Commission on e-cars from China will not be without consequences for the highly export-oriented German economy".

The fear was further fueled by the reaction of China's Ministry of Commerce, which said it was ready to take all necessary measures to protect the interests of its manufacturers.

The VDA's Hildegard Müller called on the EU and China to resolve the issue through negotiations, adding that "it is also up to China to approach Europe with constructive proposals and stop anti-competitive behavior consistently and quickly to avoid escalating trade conflicts".

“We need China to solve global problems, including climate change. A trade conflict would also threaten this transformation," says Müller.

Her criticism of the tariffs was not shared by European clean transport NGO Transport & Environment (T&E), which welcomed the decision.

"The EU's Green Deal came with the promise of growth and jobs, and that's not possible if all our EVs are imported," said the organization's EV expert Yulia Poliskanova.