European nations pave the path for levies on electric vehicles produced in China
The EU has the power to levy extra taxes on electric cars originating from China, despite Germany's objections. A significant number of EU countries didn't voice their opposition to this plan, as reported by multiple EU diplomats. This means the EU Commission now has the authority to enforce these duties, with a potential rate of up to 35.3%.
Germany wasn't successful in swaying other EU countries, despite voting against the duties in Brussels to prevent them. To overturn the decision, at least 65% of the EU population would need to be against the plan, and apart from Germany, only four other member states joined in the vote, as per diplomats.
Initially, the German government was divided on this issue. Chancellor Olaf Scholz made a last-minute decision before the vote, with the finance and transport ministries, led by the FDP, pushing for a 'no' in Brussels. Scholz also voiced concerns about potential punitive duties. However, the economics and foreign ministries, led by the Greens, advocated for abstention, aiming to continue negotiating with China.
The EU Commission imposed these additional duties following an investigation that accused Beijing of using subsidies to manipulate the market in the EU. Whether these duties will take effect in early November is ultimately up to the Commission. If a compromise with China is reached beforehand during negotiations, the duties can be withdrawn.
Friday's vote saw numerous abstentions, resulting in no clear majority in favor of the duty surcharges. Consequently, the 27 EU countries failed to issue a unified statement.
The EU, with this decision, is firmly asserting its economic influence within international trade relations. Despite Germany's opposition, a majority of EU countries supported levying extra taxes on electric cars from China.
