EU Imposes Provisional Duties on Chinese EV Imports

The European Commission plans to set provisional duties of up to 38.1% on Chinese electric vehicle imports, potentially sparking retaliation from China. While the immediate macroeconomic effect is minimal, the long-term goal is to curb future growth in EV imports. This move marks a significant shift in EU trade policy.

The European Commission said on Wednesday it would set provisional duties of up to 38.1% on imports of Chinese electric vehicles, a move likely to draw possible retaliation from China. COMMENTARY:

ANDREW KENNINGHAM, CHIEF EUROPE ECONOMIST, CAPITAL ECONOMICS "The immediate effect of the additional duties would be very small in macroeconomic terms. The EU imported around 440,000 EVs from China in the twelve months ending in April, which were worth €9bn or around 4% of household expenditure on vehicles.

"But the anti-subsidy duties are intended to limit the future growth in EV imports which would otherwise take place rather than to block existing trade. "The decision marks a big change in EU trade policy because, although the EU has used trade defence measures regularly in recent years, including against China, it has not previously done so for such an important industry. And Europe has been reluctant to engage in the kind of protectionism that the US has deployed since Donald Trump’s presidency."