The European Union approves tariffs on Chinese electric vehicles.

• On Friday, the European Union approved final tariffs on Chinese-made battery electric vehicles (BEVs).
• The European Commission's proposal to impose tariffs on imports of battery electric vehicles (BEVs) from China has been approved by EU Member States.
• The EU stated that it is still seeking an alternative solution in China, despite the implementation of tariffs.

On Friday, the European Union approved final tariffs on Chinese-made battery electric vehicles (BEVs).

The European Commission's proposal to impose tariffs on imports of battery electric vehicles (BEVs) from China has been approved by EU Member States.

In June, the EU declared that it would impose higher tariffs on Chinese electric vehicles due to their alleged reliance on "unfair subsidies" and the potential harm they posed to European electric vehicle manufacturers.

The probe disclosed duties for individual companies based on their level of cooperation. Provisional duties were initially implemented in July, but were later revised in September following feedback from interested parties.

The China Chamber of Commerce to the EU expressed "deep disappointment" with the voting outcome and is "strongly dissatisfied" with the EU's adoption of protectionist trade measures.

The chamber urged the EU to exercise caution in implementing final measures, delaying their implementation and seeking solutions through negotiations. The EU stated on Friday that it was still searching for alternative solutions, despite the adoption of tariffs.

The Chinese Chamber of Commerce to the EU reiterated its stance that the EU's probe into Chinese EVs was politically motivated and an unjustified protectionist measure, stating that higher duties would affect not only Chinese companies but also international businesses producing EVs in China.

Industry response

German automakers criticized the EU's decision.

The European Commission's decision to impose tariffs on imported cars was criticized by Mercedes Benz as a "mistake," while BMW warned that it was a "fatal sign" for Europe's auto industry, according to Reuters.

Volkswagen, facing a crisis, stated that imposing duties would not enhance the competitiveness of the European automotive industry.

Volkswagen urged the EU Commission and Chinese government to continue talks to prevent countervailing duties and a trade conflict. An alternative, negotiated solution was still possible until the tariffs are implemented later this month.

Volvo Cars, owned by Geely Holdings, announced that it will continue with its strategy of building cars in the regions where they are sold and has made a long-term investment in Europe.

Stellantis, a French-Italian conglomerate, stated that the industry is under pressure due to plans to decrease CO2 emissions and competition from China. The company emphasized that policies supporting demand and maintaining stability of rules are crucial at this time.

At 12:19 p.m. London time, European autos stocks were up 1.42%.

Division in the EU

After months of debates and deliberations among EU members, a decision was made regarding increasing tariffs, with differing opinions expressed among the members.

Although France initially backed the measure and urged the EU to initiate talks, Germany has since opposed the move, expressing apprehension about the potential impact on its struggling automotive industry.

The possibility of retaliation from China has been a major concern for certain EU members, particularly given that China has already initiated anti-dumping investigations into pork and brandy exports from the EU, as well as an anti-subsidy probe into EU dairy products.

On Friday, German Finance Minister Christian Lindner urged the European Commission to avoid initiating a trade war.

Ursula von der Leyen's EU Commission should not trigger a trade war, even though there was a vote for potential punitive tariffs against China. A negotiated solution is needed, as stated in a post on social media platform X according to a CNBC translation.

— CNBC's Sam Meredith and Ryan Browne contributed to this story.