Global Trade, Tariffs & Battery Electric Vehicles – Latest updates

Battery Electric vehicles (BEVs) are becoming central to trade policy, affecting global trade and the investment decisions of OEM and suppliers. Here are some key developments.

European Union

In October 2023, the European Commission began investigating government subsidies on Chinese-made BEVs. In July 2024, it introduced company-specific provisional tariffs ?for BEVs.

The definitive duties decided were: BYD (17%); Geely (18.8%) and SAIC (35.3%).?There’s also a 7.8% duty on Tesla.

Companies not involved in the anti-subsidy enquiry face a 21.3% average duty if they cooperated, and 35.3% if not, on top of the EU's standard 10% tariff on Chinese BEVs. The EU has been negotiating with China, and rejected minimum price or import cap proposals. EU member states voted on September 25, 2024, to make these duties permanent for five years.

United States of America

In September 2024, the US confirmed updates to the Section 301 probe into China's tech transfer, IP, and innovation practices. Proposed tariffs on Chinese EVs and lithium-ion batteries stay at 100% and 25% respectively to be introduced in 2024.

Canada

From 1 October 2024, Canada has also imposed a 100% tariff on imports of Chinese BEVs.

United Kingdom

The UK's new Business and International Trade Secretary, Johnny Reynolds to date has not initiated an anti-subsidy inquiry. UK firms must petition the Trade Remedies Authority and demonstrate the domestic car industry is being damaged.?A surge in Chinese BEV imports could prompt a safeguard investigation, and the Department for Business and Trade stated they will intervene if the UK automotive sector is at risk.

Chinese response

China has sought WTO dispute consultations over the EU's anti-subsidy investigation and also requested consultations on Canadian measures. If unresolved, China may seek a WTO panel ruling.

Implications for businesses

The estimated additional import duty cost is €2.6bn, based on 2023's trade, with Chinese OEMs expected to shoulder most of it. This may hasten production shifts to the EU & other locations outside of China.

If trade restrictions escalate, retaliation could affect the supply chain, including critical minerals and BEV technologies, even unrelated industries. Businesses must consider such trade developments as part of location strategies and comply with trade and customs laws, focusing on how local value affects origin rules for customs.

George Riddell , Director

Richard Norman Director