EU’s Provisional Punitive Tariffs for Chinese E-Cars: A Step Away from its Green Deal Goals 

In July this year, the EU Commission suggested the punitive tariffs for imported electric cars from China. The provisional countervailing duties up to 36.3 percent were announced on 20. August. If passed by the majority of the member states in mid-October, the tariffs shall come into force and apply for five years for the time being. 

For the Chinese manufacturer BYD, the EU provides for a final tariff of 17 percent, for Geely 19.3 percent and for Saic as high as 36.3 percent. The punitive tariffs also apply to the Western carmakers such as Tesla and VW which produce in China, though lower, respectively at 9.0 percent and 21.3 percent. 

With the government’s support for the clean energy policies, the Chinese electric-car industry rose 70 percent worldwide last year to a value of $ 34.1 billion according to Atlantic Council. Almost 40 percent of these e-cars went to the EU. The EU Commission accuses China of inadmissible subsidies for its manufacturers and fears damage to European providers such as company closures or layoffs. EU Commission President Ursula von der Leyen had justified the investigation that the world markets were “flooded with cheaper Chinese electric cars”. 

The Commission staff, however, admitted that the study did not show any evidence of damage to European manufacturers that have already occurred. The Chinese Chamber of Commerce to the EU (CCCEU) condemned the planned tariffs sharply and accused the commission a “protectionist approach”, emphasizing that there is no sufficient evidence that electric cars from China harm European manufacturers. China called the World Trade Organization in the dispute at the beginning of August.

Meanwhile, the demand for electric cars in the EU goes severely back. In July, for example, 36.8 percent fewer electric cars were approved than in the previous year, reported the Federal Motor Transport Authority in Germany. As a big car nation, Germany’s own car industry has overslept the e-car era, according to some German experts.

This phenomenon does not seem to help the EU go toward the direction of its Green Deal. With the Ordinance on the European Climate Act, the EU’s political goal of achieving climate neutrality in 2050 has become a legal obligation. By law, furthermore, the EU and its Member States have accepted the obligation to reduce net greenhouse gas emissions in the EU by 2030 by at least 55 % compared to 1990. The goal has emerged from an impact analysis of the Commission and legally binding.

How shall the punitive measures against the e-car imports from China effect the EU’s goals of its Green Deal? Should the tariffs be stopped? Profound and insightful analysis of the possible scenario of the punitive measures in relation to the EU’s environmental prospects is to be desired.