In a move that could potentially raise the prices of Chinese electric cars in the European Union (EU), politicians have referred to them as a threat to the region's own industry. The EU has announced that it has "provisionally concluded" that Chinese electric vehicle (EV) manufacturers will face tariffs starting from July 4th unless effective resolutions are reached through discussions with Chinese authorities.

The EU's decision comes as it continues to investigate what it claims is a flood of cheap, government-subsidized Chinese cars in the trade bloc. China has responded by alleging that the tariffs violate international trade rules and labeling the investigation as "protectionism."

As part of the investigation launched by the EU's governing European Commission in October, EV makers who cooperated will face an average duty of 21%, while those who did not will face a higher duty of 38.1%. Additionally, three specific companies will face individual charges. This also affects non-Chinese car companies, including EU-based ones like BMW, who produce some EVs in China. The commission has stated that Tesla may receive a customized duty rate as a result of a specific request they made. These charges would be added to the current 10% tariff on all electric cars produced in China.

The EU's actions follow the United States' decision to significantly raise its tariff on Chinese electric cars from 25% to 100% last month. This move has drawn criticism not only from China but also from politicians within the EU and various industry figures.

China's foreign ministry spokesperson, In Jian, described the anti-subsidy investigation as a case of protectionism and warned that the tariffs could potentially damage China-EU economic and trade cooperation, as well as the stability of the global automobile production and supply chain.

The tariffs on Chinese electric cars will be definitively implemented from November unless there is a qualified majority of EU states voting against the move. Germany's Transport Minister, Volker Wissing, expressed concerns about potential trade wars with Beijing and criticized the European Commission's punitive tariffs, highlighting their negative impact on German companies and their flagship products.

The ACEA, the European Automobile Manufacturers' Association, stressed the importance of "free and fair trade" to ensure the competitiveness of the European car industry. Mercedes-Benz and Stellantis, the owner of multiple well-known brands such as Citroën, Peugeot, Vauxhall, and Fiat, also voiced their support for free trade. Stellantis specifically stated that it does not endorse measures that contribute to the fragmentation of global trade.

Some EU car companies have called for the implementation of a comprehensive bloc-wide industrial policy to effectively address global competition. According to the International Energy Agency's annual Global EV Outlook, China accounted for approximately 60% of the global total electric vehicles sold last year, with over eight million units.

With Brussels expected to introduce tariffs on Chinese electric vehicles entering Europe, the ramifications of this decision continue to reverberate across the continent. As France calls for a snap election, other European countries are carefully evaluating the potential gains and losses associated with these trade disputes.