Electric car clash: China threatens duties on large EU diesels

European cars with large diesel engines are the next step in Beijing's retaliation in the clash on electric vehicles with Brussels. The Chinese Ministry of Commerce discussed the increase in tariffs (now 15%) on cars imported from the EU with representatives of the domestic automobile industry. This was reported by the state-run Xinhua news agency. The response to the tariffs launched by the European Commission thus rises in tone, compared to the threat of anti-dumping measures on the European dairy sector, with the investigation announced in recent days into EU subsidies.

For now it is only a signal, albeit a heavy one. Under consideration in Beijing are restrictive measures on passenger vehicles with engines over 2.5 litres: in 2023, China imported 196 thousand from Europe, up 11% year-on-year, according to data from the China Passenger Car Association. In the first four months of 2024, imports amounted to 44 thousand cars, down 12% on the same period in 2023.

EU car shipments to China reached a value of EUR 19.4 billion last year, while the bloc bought EUR 9.7 billion worth of e-cars made in China, according to Eurostat.

The threat of duties on cars is in addition to the anti-dumping investigation on dairy products, the one on pork and the WTO appeal against the Brussels squeeze.

The development had been in the air since June, when Brussels announced countervailing duties on electric cars, which were confirmed in August. The main target of retaliation would be Germany. China accounts for about 30 per cent of the sales of German car manufacturers, which are by far the biggest exporters of vehicles with engines of 2.5 litres or more in the country, with $1.2 billion in shipments to China since the beginning of the year, according to Chinese customs data.