EU Probes into Chinese Subsidies and Imports

Reuters

17:19 JST, July 5, 2024

July 4 (Reuters) – The European Union will impose tariffs of up to 37.6% from July 5 on imported electric vehicles made in China, ratcheting up trade tension with Beijing, in a latest effort to protect home-grown manufacturers.

It has also launched probes into whether Chinese clean tech producers are dumping subsidized goods on EU markets and whether Chinese-owned companies unfairly benefit from subsidies while operating inside the European Union.

The European Commission, which is carrying out the investigations, says its aim is to prevent unfair competition and market distortion.

Here’s what you need to know about the investigations:

ELECTRIC VEHICLES

The Commission said on June 12 it would impose new tariffs on imports of EVs made in China over what it said were excessive subsidies.

The provisional duties will come to force on July 5, with the anti-subsidy investigation set to continue until Nov. 2, when definitive duties, typically for five years, could apply.

BYD 002594.SZ will face duties of 17.4%, Geely 0175.HK 19.9% and SAIC 37.6%, the EU said on July 4. These are on top of the EU’s standard 10% duty on car imports.

Companies deemed by the EU to have cooperated with the investigation, including western carmakers Tesla TSLA.O and BMW BMWG.DE, will be subject to 20.8% tariffs and those that did not cooperate a rate of 37.6%.

TINPLATE STEEL

The Commission opened on May 16 an anti-dumping investigation into flat-rolled products of iron or steel plated or coated with Chinese tin.

The EU’s official journal said the investigation follows a complaint from European steel association Eurofer.

The investigation is to be concluded within 14 months, with the possible imposition of provisional duties in seven to eight months.

WOOD FLOORING IMPORTS

The European Commission initiated an anti-dumping investigation into wood flooring imports on May 16, following a complaint by the European Parquet Federation.

Under investigation are assembled multilayered wood flooring panels. Panels of bamboo, or with at least the top layer of bamboo, are excluded as are panels for mosaic floors.

MEDICAL DEVICES

The European Commission launched a probe into Chinese public procurement of medical devices, the EU’s official journal said on April 24.

The investigation is the first under the EU International Procurement Instrument, which aims to prevent countries from unfairly favoring domestic suppliers.

If the Commission finds that European suppliers don’t have fair access to the Chinese market, it could place restrictions on Chinese medical device companies bidding in EU public tenders.

The investigation is to be concluded within nine months, although the Commission can extend this period by a further five months.

WIND TURBINES

The EU is investigating subsidies received by Chinese suppliers of wind turbines destined for Europe, the bloc’s anti-trust commissioner Margrethe Vestager said on April 9.

It will look into wind park development in Spain, Greece, France, Romania and Bulgaria, Vestager said without naming specific companies.

China said the probe was “discriminatory” against Chinese enterprises and endorsed protectionism.

SOLAR PANELS

The European Commission will close its investigation into Chinese bidders in a public tender for a solar park in Romania after the companies withdrew from the process, European Industry Commission Thierry Breton said on May 13.

It launched two investigations on April 3 into whether the Chinese participants benefited excessively from subsidies in bidding for a contract.

It first investigated a consortium comprising Romania’s ENEVO Group and a subsidiary of China’s LONGi Green Energy Technology Co 601012.SS. The second consortium investigated comprised subsidiaries of Chinese state-owned Shanghai Electric Group Co. 601727.SS.

Breton said that the Commission took note of the withdrawal of LONGi Solar and Shanghai Electric from bidding and would therefore close its investigation.