China’s commerce ministry expressed strong opposition to the European Union’s recent tariff hike on Chinese electric vehicles (EVs), which now reaches as high as 45.3% after the approval from the bloc’s committee on Wednesday.
The move follows an anti-subsidy investigation launched by the EU in 2023, alleging that Chinese EVs receive illegal subsidies that could harm the European EV industry. In response, China labeled the investigation “unreasonable and non-compliant” and filed a complaint through the World Trade Organization’s dispute settlement mechanism.
While both sides have agreed to continue negotiations, the tariff hike has already impacted Chinese EV shares. BYD’s stock traded near flat, while Nio and Xpeng recorded declines of 3.07% and 0.11%, respectively.
The extra tariffs range from 7.8% for US makers like Tesla to 35.3% for SAIC Motor. The add-on stocks on top of the current 10% standard import duty for cars to the bloc.
Ken Peng, head of Asia investment strategy at Citi Wealth, remarked that while the impact may not be substantial, the tariffs could drive Chinese producers to diversify supply chains and expand production outside of China. Peng also noted a potential risk of retaliation from China, potentially targeting agricultural and luxury imports from Europe.
