The European Commission has informed EU member states that it will continue negotiations with China even after a vote on imposing final import tariffs on Chinese electric vehicles (EVs), according to sources familiar with the matter. The Commission, which is conducting an anti-subsidy investigation into Chinese-made EVs, has submitted its proposal for tariffs to the 27 EU members, based on calculations made in September. The vote is scheduled for this Friday.
In addition to the proposal, the Commission has included a provision, known as a “recital,” stating that while current talks with China have not resolved the dispute over alleged subsidies, negotiations could continue even if EU countries approve the tariffs. This suggests that the EU is open to reaching a compromise, despite the potential implementation of the tariffs.
China’s commerce ministry confirmed last week that discussions are ongoing, with both sides exploring a flexible price-commitment scheme to avoid the imposition of tariffs. This could involve setting a minimum import price and a cap on the number of vehicles exported to the EU. Although the European Commission has previously rejected price-undertaking offers from Chinese companies, it has indicated that it is willing to revisit the issue.
The proposed tariffs range from 7.8% for Tesla EVs produced in China to as much as 35.3% for companies like SAIC, which the Commission believes did not fully cooperate with the investigation. These duties would be applied on top of the EU’s existing 10% car import duty.
EU member states are set to vote on whether to implement these final tariffs for the next five years. To pass, the decision would require a qualified majority, meaning at least 15 countries representing 65% of the EU’s population must vote in favor. A final decision is expected by October 30, the deadline set under the EU’s anti-subsidy investigation framework. If a second round of voting is needed, it will take place before that date.
If the final tariffs are approved, provisional duties that have been in place since July will also need to be paid. However, companies can currently cover these payments with a bank guarantee until the investigation concludes.
This vote comes at a critical time for EU-China trade relations, with the outcome likely to impact the future of Chinese EV exports to the European market.