Navigating the EU’s Provisional Countervailing Duties on EV Originating in China: Implications and Strategies

Navigating the EU’s Provisional Countervailing Duties on EV Originating in China: Implications and Strategies

On 12 June 2024, the European Commission (“Commission”) provisionally determined that electric vehicles (“EV”) originating in China benefit from unfair subsidizations, which pose a threat of foreseeable and imminent injury to EV industry of EU. The Commission has informed those EV producers in China that it would impose provisional countervailing duties (“Provisional CVDs”) of between 17.4% and 38.1% on imports of EV originating in China from 4 July 2024.   

The two Chinese EV makers, BYD and Geely, who cooperated in the anti-subsidy investigation on imports of EV originating in China initiated by the Commission on 4 October 2023 (“EU Anti-Subsidy Investigation”), would be subject to individually calculated duties of 17.4% and 20% respectively.

Other EV producers originating in China who cooperated with the Commission in the EU Anti-Subsidy Investigation yet were not assigned individual duty rates would be subject to the weighted average duty of 21%.

All other EV producers originating in China who did not cooperate in the EU Anti-Subsidy Investigation, including SAIC, would be subject to the duty of 38.1%.

Implications and Options Ahead

The Commission has reached out to Chinese authorities to explore possible solutions compatible with WTO rules. Should no effective solutions be found, the above-referenced Provisional CVDs would be introduced on and after 4 July 2024 and last until the definitive countervailing duties (“Definitive CVDs”) are concluded by the Commission within the following 4 months. In the event that the aforementioned findings are upheld by the Commission during its final assessment, the Commission may impose such Definitive CVDs on EV originating in China for 5 years.

After the imposition of the Definitive CVDs, any other EV manufacture producing in China not selected in the final sample can petition for an accelerated review to have its specific situation investigated and concluded within 9 months.

Alternatively, EV producers and/or exporters originating in China may elect to submit an application of voluntary price undertakings aiming to mitigate the effect of countervailable subsidies concluded in the EU Anti-Subsidy Investigation.  

Fortior Law’s Expertise in Trade Dispute Litigation

At Fortior Law, we have extensive experience in trade litigation, including litigation concerning CDVs. Our lawyers achieved multiple victories for clients in this area including obtaining the lowest duty rate in an antidumping investigation, succeeding in a petition for price undertakings and facilitating the clients’ compliance with the undertaking agreement throughout its term. The head of our trade disputes practice speaks Mandarin, while our head office is based at the seat of the World Trade Organisation, Geneva.     

For more information or to discuss your specific case, reach out to [email protected] or [email protected].

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