The European Union has warned it will impose additional duties of up to 38.1 percent on Chinese electric vehicles next month.
The European Commission made the announcement on Wednesday. It said the new provisional tariffs would be introduced on top of the current levy of 10 percent.
The commission says China-made EVs benefit from unfair subsidies, “causing a threat of economic injury” to EU producers.
It says the measure will go into effect from July 4 unless discussions with China lead to an “effective solution.”
The additional levies also cover Western manufacturers in China.
In October, the commission launched an investigation into EVs made in China, saying they have caused market distortions and unfair competition. It said the probe confirmed Chinese subsidies at every stage of the supply chain. The commission says Chinese EVs are rapidly increasing their share in the EU market, and that EU makers are unable to raise prices and are suffering losses.
China reacted sharply to the EU’s announcement and hinted at countermeasures.
The Commerce Ministry said in a spokesperson’s statement that China has great concern and strong dissatisfaction over the tariff hike and that the Chinese EV industry is deeply disappointed by and firmly opposed to the move.
The statement also says the country urges the EU to immediately correct its wrong practices.
The statement added the country will closely watch developments on the EU side and take all necessary measures to firmly protect the legitimate rights and interests of Chinese companies.
Germany expressed a cautious stance over the tariff hike. A government spokesperson said on Wednesday that the country does not need more trade barriers. The official also said there is still time to resolve the issue, and that the country hopes for a friendly solution.
The US government said last month that it would raise tariffs on Chinese EVs from 25 percent to 100 percent.