Are trade tensions in danger of escalating? EU imposes provisional tariffs on Chinese electric vehicles

The European Union is moving forward with plans to impose provisional tariffs on electric vehicles imported from China, which could raise tariffs to as high as 48%. The move is likely to escalate trade tensions with Beijing.

The EU confirmed on Thursday that it will apply provisional duties on three Chinese manufacturers that have been singled out for subsidy investigations. State-owned MG maker SAIC Motor Corp will face a 37.6% duty on top of the existing 10% rate, while Volvo Car parent AB Geely and BYD will be saddled with additional levies of 19.9% and 17.4% respectively.

Other EV manufacturers in China that cooperated with the investigation but were not selected will be subject to a weighted average duty of 20.8%, while firms that did not cooperate will face an increase of 37.6%. Western carmakers such as Renault $RNO.PA, BMW $BMW.DE and Tesla $TSLA are also affected, with US manufacturers currently accounting for the majority of EV shipments to the EU from China.

Interim tariffs…