DIGIVESTASI - Eropa-China Trade War Heats Up: EU Drafts New Tariffs on Chinese Electric Vehicles, The trade war between Europe and China has escalated as the European Commission released a new draft proposal on Tuesday for tariffs on Chinese-made electric vehicles (EVs). This new policy continues the temporary measures that have been in place since June, with tariffs ranging from 17% to 37.6%, significantly higher than the current 10% import duty. The draft is expected to be approved in October.

In its latest statement, the European Commission announced plans to impose an import tariff of up to 36% for five years on Chinese electric vehicles, unless Beijing offers an alternative solution to resolve the dispute over state subsidies that allegedly make Chinese EVs cheaper in the European market.

However, Tesla vehicles manufactured in China will face an additional EU tariff of only 9%. This lower rate is due to an evaluation by EU executives showing that Tesla did not receive subsidies to the same extent as other Chinese EV manufacturers.

"We are open to receiving proposals from China that could resolve this issue, similar to the tariff approach," a European Commission official told reporters, as reported by AFP on Wednesday, August 21, 2024.

This move has sparked outrage from the administration of President Xi Jinping. China firmly expressed its "strong opposition" to the tariffs and urged Brussels to work with Beijing rationally and pragmatically to avoid a "trade escalation."

"China strongly opposes and is deeply concerned about this," said China's Ministry of Commerce. "We hope that the European side will work with the Chinese side in a rational and pragmatic manner... and take practical steps to avoid escalating trade tensions," it emphasized.

The China Chamber of Commerce to the EU (CCCEU), representing Chinese companies in Europe, also condemned the European Commission's plan as unfair. They argued that the EU's stance would only exacerbate trade tensions between the two sides.

"We express strong dissatisfaction and firm rejection of the EU's protectionist approach," the CCCEU stated. "The EU's unfair trade tools to hinder free trade of electric vehicles, along with this protectionist approach, will ultimately undermine the resilience of the European electric vehicle industry," they added.

"This will exacerbate trade tensions between China and the EU, sending a negative signal against global cooperation and green development."

The EU's decision to impose these tariffs is based on the findings of an investigation concluding that the Chinese government provides subsidies to EV manufacturers. Beijing has already appealed this action to the World Trade Organization (WTO).

In the temporary rules applied in June, tariffs on Chinese EVs were increased by 17% for BYD, 19.3% for Geely, and a highest rate of 37.6% for SAIC.

There is still uncertainty about the impact of this policy on European automakers like Volkswagen and BMW, which have joint ventures in China to export electric vehicles. These companies have previously expressed concerns about the new EU policy.

According to a report by the Atlantic Council, China's electric vehicle exports increased by 70% in 2023, reaching US$34.1 billion (approximately IDR 526 trillion). Nearly 40% of these exports were directed to the EU, making it the largest market for Chinese electric vehicles.

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