European votes split on tariffs for Chinese electric cars

No majority either for or against tariffs on Chinese electric cars. The decision is now up to the European Commission

L'Europa vacilla sui dazi alle auto cinesi

By: Massimo Grassi

Published by: Brian Potter

Oct 5, 2024 at 5:36am ET

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The vote on confirmation of duties on Chinese electric cars imported into Europe took place on Friday, later than originally scheduled. Result: none. In fact, no qualified majority - 15 member states representing 65% of the Union's population - was reached neither for, nor against.

How will we proceed now? The final decision will be taken by the European Commission, which intends to continue on its own path.

The votes

According to agency reports, there were 10 member states in favour of the duties on Chinese electric cars, while half voted against: 5. What made the difference was the high number of abstentions, a good 12:

In favour Against Abstentions Bulgaria
Denmark
Estonia
France
Ireland
Italy
Latvia
Lithuania
Netherlands
Poland Germany
Malta
Slovakia
Slovenia
Hungary Austria
Belgium
Croatia
Cyprus
Finland
Greece
Luxembourg
Portugal
Czech Republic
Romania
Spain
Sweden

It was an outcome that was not a foregone conclusion until yesterday, with the 'yes' votes being supported by countries such as France, Greece, Italy and Poland. As can be seen in the table, Greece abstained instead as it failed to convince the undecided, not to mention Germany who is the leader of the anti-tariff rebellion along with Spain, whose representatives ultimately opted to abstain.

Representatives of the German government have long been asking the European Commission to retrace its steps, also in the light of concerns and pressure from their own local manufacturers (BMW, Mercedes and Volkswagen), which are at the centre of possible responses from Beijing, which could increase tariffs on European car imports, especially those belonging to premium brands.

Tariffs, what happens now?

As said, the final decision will be up to the European Commission, which in a note published at the end of the vote, specified how talks with China are still underway to 'explore an alternative solution that should be fully compatible with WTO (World Trade Organisation) rules and suitable to counter the problem of injurious subsidies established by the Commission's investigation'.

As a result, despite its intention to confirm the duties, the Commission has not abandoned the confrontation with Beijing. According to rumours from a few weeks ago, Chinese manufacturers would have offered, in exchange for the abolition of duties, various actions such as a minimum price for their electric cars sold in Europe and a maximum number of annual exports.

The main problem is that time is running out: by 30 October the Commission's implementing regulation containing the final conclusions of the investigation must be published in the European Official Journal as well as the adoption of duties, the amounts of which will be different for each Chinese manufacturer, depending on the degree of cooperation offered during the anti dumping investigation.

The reactions

There was clearly no shortage of comments immediately after the outcome of the vote. First and foremost from China, where the Geely Group (owner of Volvo, Polestar and Lotus, among others) commented:

Geely Holding expresses great disappointment with the European Commission's decision to impose countervailing duties on electric vehicles produced in China. The decision is not constructive and may hinder EU-China economic and trade relations, ultimately harming European companies and consumer interests. Geely Holding always supports free trade, strives for fair competition and strictly complies with all laws and regulations of the markets in which it operates. Geely Holding is fully committed to providing exceptional products and services to global users and will work with partners in the EU region to find solutions

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Acea, on the other hand (the association of European car manufacturers) published the following note:

ACEA has always said that free and fair trade is essential to create a globally competitive European car industry, while healthy competition stimulates innovation and choice for consumers. Free and fair trade is essential to ensure a level playing field for all competitors, but it is only one aspect of global competitiveness. For the European automotive sector to be competitive in the global race for electric vehicles, a comprehensive industrial strategy is essential, as highlighted in the Draghi report. [...] ACEA expects the regulation imposing anti-subsidy measures to be published by the end of October. We also recognise the parallel efforts of Brussels and Beijing to negotiate a possible alternative to countervailing duties

Get the backstory:

Tariffs on Chinese EVs: EU could vote on 3 October