European Union announces higher tariffs of up to 38% on Chinese EVs

The European Union on Wednesday said it would slap higher tariffs on Chinese electric vehicle imports, which it found benefit "heavily from unfair subsidies" and pose a "threat of economic injury" to EV producers in Europe.

On a preliminary basis, the European Commission, the executive arm of the EU, concluded that the battery-electric vehicles value chain in China "benefits from unfair subsidisation" and pronounced that it is in the EU's interest to impose "provisional countervailing duties" on BEV imports from China.

The additional tariffs are the result of an EU probe that began in October. The duties are currently provisional, but will be introduced from July 4 in the event of unfruitful talks with Chinese authorities to reach a resolution, the commission said in a statement. Definitive measures will be placed within four months of the imposition of provisional duties.

"The influx of subsidised Chinese imports at artificially low prices therefore presents a threat of clearly foreseeable and imminent injury to EU industry," the commission noted.

Valdis Dombrovskis, the EU commissioner for trade, told CNBC on Wednesday that the investigation was based on "facts and evidence" and added that engagement with Chinese authorities and stakeholders about potential solutions was ongoing.

A spokesperson for China's Ministry of Commerce on Tuesday said the EU decision was lacking factual and legal basis and was a "protectionist act," according to Google-translated comments.

"The findings disclosed in the EU ruling lack factual and legal basis," the ministry said. The EU had ignored that China's advantage in the EV space is based on open competition and disregarded rules set out by the World Trade Organization, it added.

"This is a