EU Approves China EV Tariffs; Negotiations To Continue

The European Union and China will continue to seek alternative ways to resolve the ongoing trade dispute, which has created divisions among EU member states.

On October 4, the European Commission announced that its proposal to impose permanent tariffs on Chinese-made electric vehicles had secured the required backing from member states. In its statement, the Commission emphasised that it would also maintain parallel negotiations with China “to explore an alternative solution that is fully compatible with WTO rules, effectively addresses the harmful subsidies identified in the Commission’s investigation, and can be monitored and enforced.”

A final regulation must be officially recorded by October 30, the Commission noted.

With this approval, the European Commission, the EU’s executive body, is now set to implement the tariffs, which will remain in place for five years. Ten member states supported the measure, while Germany and four others opposed it, and 12 countries abstained, according to sources familiar with the process, who requested anonymity.

The EU’s decision follows an investigation that concluded China had unfairly subsidised its electric vehicle industry, a claim Beijing denies. In response, China has threatened to impose tariffs on European products such as dairy, brandy, pork, and automobiles.

The EU is actively working to reduce its economic dependence on China. Last month, former European Central Bank President Mario Draghi warned that “China’s state-sponsored competition” posed a threat to the EU, potentially exposing it to economic coercion. Despite conducting €739 billion ($815 billion) in trade with China last year, the bloc remained divided on whether to proceed with the tariffs.

The European Commission has consistently stressed that any alternative to tariffs—such as minimum pricing—must adhere to strict requirements, including compliance with WTO regulations, addressing the impact of Chinese subsidies, and ensuring the EU can monitor and enforce the terms.

The new tariff rates could reach as high as 35% for electric vehicle manufacturers exporting from China, on top of the existing 10% tariff rate.

For more information please contact hello@gleg.co.uk to speak to our renewable energy experts.