O Canada! Canada may levy tariffs on Chinese EVs as EU set to announce reductions

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Tariffs and subsidies are shaping up to be the underlying story for the automotive industry in China, if not the world, during 2024. Latest reports indicate that the EU may just have agreed to reduce the tariffs due to come into effect on July 4 – but don’t react until you’ve seen the figures! In separate news, it seems that Canada might be about to join the US and EU in imposing tariffs.

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On June 12 the European Union announced that tariffs would come into force on Chinese EVs imported into the zone from July 4. This was the result of a ten-month investigation by the European Commission. From July 4 imports of BYD cars would be subject to tariffs of 17.4%, Geely 20%, SAIC 38.1% with other producers who cooperated with the investigation being hit by 21% while those that had not attracted 38.1%.

MG Cyberster electric sports car on the MG stand at IAA Mobility 2023, Munich Germany.

Bloomberg, however, reported on June 26 citing a person familiar with the subject that these tariffs are now about to be cut. This may be a direct result of China’s Ministry of Commerce announcing on June 22 that China and the EU had agreed to open a dialogue over the tariffs. According to Bloomberg the tariffs for SAIC and companies that did not cooperate will now be reduced to 37.6%. Geely will now be subject to 19.9% while BYD’s rate remains unchanged. For the companies which cooperated but were not given an individual tariff the amount will reduce to 20.8% due to the figure being a weighted average. It should be noted that these tariffs are in addition to the 10% import tariff which was already in place.

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Complying with the EU investigation was onerous for Chinese producers who were required to provide detailed battery components and formulas, along with a breakdown of manufacturing costs right down to raw materials and the supply chain. Such details and scope sources claim to be unprecedented.

BYD Atto 3 electric SUV on display at the BYD stand at IAA Mobility 2023, Munich Germany.

The news from the EU comes days after news from Canada suggested that the country would join the US and EU in imposing tariffs on Chinese EVs. Under current regulations, Chinese EV imports to Canada are subject to a 6% tariff. Canadians can benefit from up to 5000 Canadian dollars (3,650 USD) toward the purchase of a fully electric or plug-in hybrid electric vehicle from the federal government and there are further incentives from provincial governments. However, in 2023 sales of BEVs, PHEVs and FCEVs only accounted for 11% of new car sales.

On June 24 the Canadian government announced it would open a 30-day public consultation period from July 2. “Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world, including here in Canada,” said Deputy Prime Minister Chrystia Freeland when announcing the consultation. Doug Ford, the Premier of Canada’s most populace province Ontario has called for a 100% tariff to protect car production jobs in the province.

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In May the US increased tariffs against Chinese EVs from 27.5% to 102.5%. It is possible that more countries like Canada will join the EU and the US in levying tariffs but others such as Norway have signalled their intention not to.

Sources: Fast Technology, Bloomberg, Al Jazeera, Autohome,

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