EU tariffs on Chinese EVs unlikely to disrupt market — Fitch

European Commission tariffs on imported Chinese electric vehicles (EV) are unlikely to disrupt the market, according to a statement from Fitch Ratings released on Friday.

The European Commission announced on Wednesday that it will impose an additional tax of up to 38.1 percent on EV exports produced in China, starting in early July, as sales of low-priced Chinese EVs have overshadowed European models.

Europe’s Chinese EV imports make up less than 4 percent of sales despite the tariffs, including Chinese-made models of foreign brands such as Volvo, Polestar, and Dacia, Fitch Ratings’ data said.

Concerns over China’s potential retaliation by implementing broader trade measures threaten mostly German automakers, whose exports to China account for 10 percent of unit sales on average.

Joint ventures of German and Chinese automakers consequently face issues amid escalated trade tensions, as the cash flow they generate can potentially affect consumer perception in China, resulting in reduced market share of German manufacturers.

In addition to the EU tariff, the Biden administration also raised the Chinese EV tariff rate to 100 percent in the US, with China saying it might file an appeal over World Trade Organization rules.

German economy chief visits China

Germany's economy minister will visit China next week, Berlin said Friday, as the EU and Beijing are locked in a row about planned new tariffs on imports of Chinese electric vehicles.

Robert Habeck will make a trip to Beijing, Shanghai and Hangzhou from Friday to Sunday, according to a provisional schedule.

Topics on the agenda include economic ties between Europe's top economy and China, the world's second-biggest economy, as well as EU political developments and climate protection, an economy ministry spokesman said.

Habeck "will not be able to avoid addressing" the issue of the planned EU tariffs, the spokesman said, but insisted that "the minister does not speak and negotiate on behalf of the EU Commission — the EU Commission does that itself".

Before China, the minister will visit South Korea, where he will hold talks with Prime Minister Han Duck-soo in Seoul.