EU’s 30% Tariff on Chinese EVs Unlikely to Reduce Imports, Experts Say

EU regulators plan 30% tariffs on Chinese EVs to aid local brands, but experts say Chinese automakers’ efficiency and profit margins will let them absorb the tariffs, keeping prices low.

European regulators are preparing to impose significant tariffs on Chinese auto imports to support local brands. However, experts believe this measure may not be effective. Chinese carmakers, known for their efficiency and substantial profit margins, are expected to absorb these tariffs and continue offering competitively priced EVs to European customers.

European lawmakers have raised concerns about state subsidies giving Chinese brands an unfair edge as their cars flood the market. Since the beginning of the year, they have been investigating and visiting Chinese factories, with a decision on the tariffs expected next week.

Analysts anticipate a 30 percent tariff announcement, but experts told Auto News that this would not significantly impact the influx of Chinese EVs. Chinese automakers’ large margins could absorb such tariffs without affecting consumer prices, though profits might decrease.

Some analysts argue that tariffs would need to be as high as 50 percent to disrupt Chinese imports effectively. Conversely, a study by the Kiel Institute for the World Economy predicts that a 20 percent tariff could reduce Chinese EV imports by $3.8 billion, or around 125,000 vehicles, potentially boosting sales of European-made EVs by $3.3 billion. If the EU imposes tariffs, China is expected to retaliate with new taxes on European car exports.