Starting next month, the EU will levy extra charges of up to 38.1% on Chinese electric vehicle imports.

This action is expected to provoke possible retaliation from China.

Brussels will impose tariffs on Chinese electric vehicle manufacturers. The rates will be 17.4% for BYD, 20% for Geely, and 38.1% for SAIC. This is due to what Brussels sees as excessive subsidies. The Chinese Ministry of Commerce said it will closely monitor the situation and take necessary action to protect the legal rights of Chinese businesses.

The anti-subsidy investigation will last until November 2. After that, definitive measures, typically lasting for five years, may be applied. The EU provisional duties are scheduled to take effect on July 4. The Commission will apply a 21% rate to businesses it thinks helped with the investigation and a 38.1% rate to businesses it found did not help.

The 10% current EU duty will be in addition to the new levies. Companies from the West that export automobiles from China to Europe, like BMW and Tesla, were seen as cooperating parties. Vice President of the Commission Margaritis Schinas warned EU automakers that Chinese-made vehicles were gaining unfair advantages from subsidies. Analysts had predicted that the suggested tariffs on Chinese EVs would be between 10% and 25% higher.

Reuters contacted BYD, Geely, SAIC, and Tesla on the report; none of them responded right away. The decision was made at a time when European automakers are under competition from Chinese rivals offering more affordable EVs. China criticized the EU for its anti-subsidy probe and asked for collaboration. It also pressured certain EU nations. However, China has not specified how it would respond to tariffs.