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The European Commission is extremely dissatisfied with the sharp increase in Chinese electric vehicles (EVs) in the EU market and is ready to impose anti-dumping duties on Chinese electric car imports as early as next spring, said EU Commission Executive Vice President and Commissioner for Trade Valdis Dombrovskis. Last Fall, the EU launched a probe into the import of cheaper Chinese EVs.

The Chinese Ministry of Commerce protested the investigation, saying that it is a “protectionist” act that will distort the global automotive industry and the supply chain.

Beijing may raise duties on European manufacturers in retaliation for higher tariffs on its electric cars, analysts warn. In particular, China may hike its import duties on European-made cars from 15% to 25%, or there could be even more significant consequences.

Potential retaliatory measures on the part of Beijing may have an extremely negative effect on European industries, experts say. “EU economies heavily rely on the purchase of semiconductors and batteries from China and China may introduce export duties or quotas on semiconductors and batteries to EU countries in response. This would push the costs for European producers of electric cars higher, which would neutralize the effect of the bloc’s anti-dumping duties on Chinese EVs, but also cause an increase in domestic prices in the European market,” Anastasia Prikladova, associate professor at the Plekhanov Russian University of Economics, explained.