China fights back against Europe’s EV tariff hike

China has refused to accept Europe’s protectionist trade policies on electric vehicles (EVs). After a prolonged investigation into potentially unfair subsidies, the European Commission has gone ahead with hefty tariff increases on China-made EVs imported into the region. All China-made EV imports remain subject to the historic 10% tariff, but there is now an additional tax on top that varies by brand from 7.8% (Tesla) to 35.3% (SAIC). The argument was that these brands received significant subsidies from the Chinese government, which gave them an unfair advantage over their European rivals.

In response to the tariff increase, which officially took effect on 30 October 2024, China’s Ministry of Commerce responded with a statement that it “does not agree with or accept the ruling” and filed a lawsuit under the World Trade Organization (WTO) dispute settlement mechanism.