China threatens to raise tariffs on large-engine sedans and SUVs to 25% in response to US’ and EU’s actions

China has threatened to temporarily raise tariffs on large-engine cars – including those from the European Union (EU) – in response to the West’s attempt to limit the import of Chinese-brand EVs. This was revealed in a statement posted on X (formerly Twitter) by the China Chamber of Commerce to the EU (CCCEU).

“The chamber noted that Liu Bin, chief expert at the China Automotive Technology and Research Centre and deputy director of the China Automotive Strategy and Policy Research Centre, suggested in an exclusive interview with the Global Times that China could raise its temporary tariff rate on imported large-engine vehicles to a maximum of 25%,” read the statement. The current tariff rate imposed is 15%.

The proposed adjustment to 25% stated in the May 21, 2024 statement is said to align with World Trade Organisation (WTO) regulations and will affect petrol-powered sedans and SUVs with engine capacities larger than 2.5 litres.

China’s response comes following the United States’ decision to raise tariffs on made-in-China EVs from 25% to 100%. The European Union is also expected to hike import duties – currently at 10% – on Chinese EVs next month on July 4 after Belgium launched an investigation last year into Chinese electric car subsidies, which they deemed were unfair practices against Europe’s carmakers.

China threatens to raise tariffs on large-engine sedans and SUVs to 25% in response to US’ and EU’s actions

In a more recent statement on June 3, 2024, China’s minister of commerce, Wang Wentao, said the EU’s anti-subsidy investigation into Chinese EVs as well as the ‘Foreign Subsidies Regulation (FSR)’ applied on July 12, 2023 and the ‘International Procurement Instrument (IPI)’ that came into effect on August 29, 2022 represented the “three arrows” of protectionism that the EU has intensively shot at China.

Earlier on May 31, 2024, the CCCEU published an excerpt from a press conference where Mao Ning, deputy director of the Information Department of the Ministry of Foreign Affairs of China, said, “China has stated its position multiple times on the EU’s anti-subsidy investigation into the imports of EVs from China.

“Let me just say that the nature of the investigation is protectionist. There are many practices in the investigation that are simply unjustifiable and inconsistent with the rules and the EU’s accusation of China’s so-called subsidisation is untenable,” she continued, adding that “China will not sit back and watch” and will take necessary measures to safeguard its lawful rights and interests.

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