Brussels | November 28, 2025:
The European Union has formally approved tariffs of up to 45% on electric vehicles imported from China, a sweeping trade measure set to take effect January 1, 2026, following a year-long anti-subsidy investigation into what Brussels calls “unfair state support” for Chinese manufacturers.
The new duties combine the EU’s existing 10% base tariff with additional levies of up to 35%, targeting major Chinese automakers including BYD, SAIC, and others whose exports to Europe reached €10 billion last year. The move marks one of the EU’s most aggressive trade actions in decades amid a rapidly intensifying global EV market war.
EU Trade Commissioner Valdis Dombrovskis defended the tariffs, emphasizing they aim to protect 300,000 European auto manufacturing jobs and counter heavy subsidies that he says distort competition. Chinese EVs currently hold 25% of the EU market, often undercutting European models by around 20%.
China responded sharply. Commerce Minister Wang Wentao vowed “proportionate countermeasures,” including potential restrictions on rare earth exports, which are critical to EU battery production. Beijing has also hinted at reciprocal duties on European industrial goods.
The tariffs exposed political fractures within Europe. German Chancellor Olaf Scholz criticized the move, warning that retaliation could hurt German automakers such as Volkswagen, which rely heavily on operations in China. Notably, Tesla’s Shanghai-made vehicles received tariff exemptions, avoiding the higher rates under EU assessment rules.
The EU’s decision adds pressure to already strained global trade dynamics, following U.S. President Joe Biden’s move to impose 100% tariffs on Chinese EVs earlier this year. Analysts warn the latest escalation could fuel a triangular trade conflict involving the U.S., EU, and China.
Market reactions were immediate: Brussels stocks fell 1.2%, while Beijing’s markets rose on expectations of new economic stimulus. Industry group ACEA cautioned that the tariffs could raise consumer prices and warned Europe may face €5 billion in annual losses if China retaliates aggressively.
As of 12:00 PM CET on November 28, EU officials insist the measures are necessary to level the playing field, while Beijing’s response suggests a broadening confrontation that may reshape the future of the global EV industry.
