European policymakers warned a few months ago that the continent was being flooded with cheap Chinese electric vehicles . They accused Beijing of backing major production overcapacity to allow China's automakers to grow their share of the global EV market.
The European Commission, the EU's executive arm, launched an anti-subsidy probe into the oversupply issue late last year and warned China's EV makers that they could face a new import tariff to offset what Brussels said was unfair competition for European carmakers.
On Wednesday, the Commission said it was planning to impose tariffs of up to 38% on Chinese electric vehicles from July 4 and those tariffs would vary by automaker. The EU currently levies a 10% tariff. The announcement prompted a warning of retaliation by Beijing.
The United States is due to levy a 100% import tax on Chinese-made electric cars, up from the current 25%, which will effectively keep Chinese automakers out of the US market.
While most industrial companies in Germany support the tariffs, according to a study by the Cologne-based Institute for Economic Research (IW), Volker Treier, head of foreign trade at the German Chamber of Industry and Commerce (DIHK) warned the move would have consequences for Europe's largest economy, which relies on exports to China.
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If the threat from Chinese automakers is so large, why did Great Wall Motor, China's seventh largest car manufacturer, announce last week it was closing its European headquarters in Munich, southern Germany, due to disappointing sales?
The decision sparked........