TMTPost -- China issues a severe warning following the European Union’s recent adjustment of its proposed sharp increase in tariffs on electric vehicle (EV) imports.  

Credit：the European Commission

China firmly opposes the latest draft that the EU released to slap hefty new tariffs on Chinese EVs and will take all necessary measures to defend the legitimate rights and interests of Chinese enterprises, a spokesperson with the Ministry of Commerce of China said Tuesday. The EU draft was based on the "facts" unilaterally determined by the EU, rather than facts recognized by both sides, the person noted.

The European commission's anti-subsidy investigation process on Chinese EVs did not comply with the rules of the World Trade Organization (WTO) and was an act of "unfair competition" under the guise of "fair competition,"  the spokesperson said. During the investigation process, the Chinese government and EV industry have provided tens of thousands of pages of legal documents and evidence materials through various means such as questionnaires, written comments, and statements at hearings, and have comprehensively and thoroughly defended against the unreasonable and non-compliant practices of the European side. However, from the recent draft decision, one can see the EU didn’t fully take into account of comments of the Chinese side and still insisted on its wrong practices of tariff hikes, the spokesperson stated, adding that Brussels treated Chinese companies differently with sampling and distorted the results of its probe.

The European Commission's wrong practice will not just disrupt the stability of the global automotive supply chain and harm the interests of European consumers, but also undermine the EU's green transformation and global cooperation in addressing climate change, Chinese authorities and EV industry pointed out during the EU investigation, according to the spokesperson.

The spokesperson called on the EU to take practical measures to prevent the escalation of trade disputes, noting the two sides have conducted more than 10 rounds of technical consultations on this case since the end of June.

The spokesperson’s remarks came right after the European Commission Tuesday its draft decision to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China to interested parties.The Commission said it would make a slight adjustment of the proposed duty rates based on substantiated comments on the provisional measures, though it still believes Chinese EV production has been benefited from subsidies. The regulatory body proposed to add up to 36.7% to the current 10% duty faced by Chinese exporters, modestly lowered from the initial maximum planned duty of 37.6% set in the start of July. 

The EU remains open to reaching an effective solution with the Chinese authorities in a [World Trade Organization (WTO)-compatible manner, the Commission said. According to the executive arm of the EU, EV companies subjected to proposed tariffs have ten days until August 30 to provide comments and request hearings. If a qualified EU majority votes in favor of the final regulation, the tariffs could become law by October 30 and remain in effect for five years, with the option extensions upon review.

Based on the latest draft decision,Tesla appears to be the big winner as the EU will impose an extra 9% tariff on Tesla EVs originated from China, much lower than the 20.8% under the provisional duties that took effect in July.

The EU has slightly lowered tariff rates that three sampled Chinese EV makers. The additional individual duties on China’s top EV manufacturer BYD Co., Ltd., Volvo Car parent Geely and state-owned SAIC Motor Corp. would be 17%, 19.3% and 36.3%, respectively. Other cooperating companies would be subject to a 21.3% tariff, while non-cooperating companies would be slapped with a 36.3% rate.