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Car manufacturers in China want 25% import tax on EU vehicles – report

  • EU launched probe last year into Chinese state subsidies for EV makers
  • Last week, it said Chinese car imports could face levies topping 38%
  • Now Chinese car manufacturers are said to be seeking retaliatory action

Time 12:23 pm, June 21, 2024

Car manufacturers in China are said to be demanding up to 25% of import taxes on EU rivals.

They are reported to have urged authorities in Beijing to take the action in retaliation for import duties being imposed on their vehicles by the EU.

According to the BBC, a closed-door meeting held by China’s Ministry of Commerce with six European car firm representatives and four Chinese saw the demand being made, aimed at EU cars that have large petrol engines.

Chinese EV makers were last week threatened by the EU with tariffs of more than 38% as of July 4.

Volkswagen told the BBC it was at the meeting but it wouldn’t comment on what was said, while Porsche also declined to give a comment and BMW didn’t immediately come back with a reply.

The BBC said that a social media account connected with Chinese state broadcaster CCTV published a report about the meeting in which it said: ‘China’s car companies called on the government to adopt firm countermeasures against the EU.

‘It is suggested that within the limits allowed by Word Trade Organisation rules, a higher provisional tariff be imposed on large-displacement petrol vehicles imported from Europe.’

State-run newspaper Global Times said in an article last month that 25% tariffs should be levied on cars that have petrol engines bigger than 2.5 litres.

But Bill Russo, from advisory firm Automobility, told the BBC their ‘luxury or ultra luxury’ status meant that another tax wouldn’t really affect volumes.

Last September, the EU said it would launch an investigation into whether Chinese state subsidies were giving the country’s EV makers an unfair advantage, and said it was considering tariffs.

The European Commission, which is the EU’s executive branch, said last week it had ‘provisionally concluded’ that EV makers in China will face import levies ‘should discussions with Chinese authorities not lead to an effective solution’.

Manufacturers co-operating with the investigation face a tariff of 21%, on average, but those that didn’t may face a levy of 38.1%.

Those would be additional to the current 10% tariff faced by all electric cars made in China.

Last month, the US said it was quadrupling its levy on Chinese-made EVs from 25% to 100%.

Stock image used for illustrative purposes

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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