The European Union is moving ahead with tariffs of up to 45% on China-made EVs (electric vehicles), signalling a major escalation in its trade clash with Beijing. Despite Germany’s opposition, the decision has garnered sufficient support from other EU members, underscoring divisions within the bloc over relations with China.

  • Tariffs set for five years: The new duties will take effect next month, costing Chinese carmakers billions of dollars as they export EVs to Europe.
  • Germany opposes, but majority rules: In Friday’s vote, 10 EU members, including France and Italy, backed the tariffs, while Germany and four others voted against. With 12 abstentions, the proposal passed.
  • Retaliation from Beijing: China has threatened to retaliate, raising concerns about a potential trade war. China’s Commerce Ministry expressed strong opposition and launched a WTO challenge.
  • Impact on European automakers: Shares in Renault and Volkswagen rose on hopes that the tariffs would give European brands a competitive edge over their Chinese rivals.
  • Potential higher EV prices: While the tariffs aim to level the playing field, consumers could face higher EV prices in the EU, potentially slowing the region’s carbon-neutral goals.

The tariff decision marks the EU’s toughest stance against Chinese trade practices in a decade, but Beijing’s threatened countermeasures could complicate ongoing negotiations.