Chinese electric cars: customs duties could be raised significantly, according to Breton

The European investigation into Chinese state subsidies for electric cars could lead to a significant increase in customs duties on these cars, said Sunday the European Commissioner for the Internal Market Thierry Breton. "Generally - I do not want to prejudge what the results of the investigation we are opening will give - but generally, if I look at what happens to the investigations that are opened, it often results in increases in customs duties of 10 to 20%," he said on the French television channel LCI.

Thierry Breton, however, remained cautious about the outcome of this procedure. "We'll see," he repeated several times. European Commission President Ursula von der Leyen announced on Wednesday the opening of an investigation into Chinese state subsidies for electric cars, in order to defend European industry in the face of prices deemed "artificially low". If, at the end of its investigation, the Commission finds breaches of trade rules, it could impose punitive tariffs on Chinese vehicles, at the risk of triggering a trade war with Beijing.

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Today, there are 10% tariffs on electric vehicles arriving in Europe from China. If I take an example, in the United States, it is 27.5%," said Thierry Breton. During the investigation, Europeans will look at "direct or indirect subsidies that are received" by manufacturers, he said. "There will be discussions with the Chinese authorities, with car manufacturers," said Thierry Breton, adding that this would concern "all cars made in China, regardless of their brands". Experts estimate the cost advantage of Chinese vehicles over those manufactured in Europe at around 20%.

But where Brussels suspects illegal practices, Beijing believes it is simply picking the fruits of its investments. According to China, the European move is "openly protectionism" and "will have a negative impact on economic and trade relations between China and the European Union". China has long relied on electric motors in the automotive industry and has taken a step ahead of Europe, particularly in battery technologies. Its manufacturers rely on their huge domestic market to now develop abroad, thanks to the strong economies of scale they enjoy.