The European Commission has announced a new nine-percent tariff on Tesla’s electric vehicles (EVs) made in China, effective soon. This decision follows a broader move last month where provisional tariffs were imposed on all Chinese-made EVs after an investigation found they were unfairly competing with European counterparts.

The new tariffs are less severe compared to those faced by other Chinese firms. For instance, leading Chinese EV manufacturers like BYD and Geely will see tariffs of 17 and 19.3 percent, respectively, while SAIC will face 36.3 percent. These rates are slightly adjusted from earlier proposals. Manufacturers that cooperated with the EU’s probe will see a tariff of 21.3 percent, whereas those that did not will be subject to the maximum 36.3 percent duty.

Tesla’s tariff is set at nine percent due to the lower subsidies it reportedly received from China compared to domestic manufacturers. The European Commission’s move is part of its strategy to protect European automotive industries amid rising competition from Chinese firms. However, China’s commerce ministry has expressed strong opposition to these tariffs and hopes for a more cooperative resolution to avoid escalating trade tensions.

The tariffs, which are subject to further consultation and approval by EU member states, follow Brussels’ broader scrutiny of Chinese subsidies affecting various sectors. The European Commission is trying to balance the protection of its auto industry with maintaining trade relations with China, a key market for European car manufacturers like Volkswagen and BMW.

In response, the Chinese Chamber of Commerce to the EU criticized the tariffs as protectionist and harmful to trade relations. Both the EU and China are grappling with trade disputes, with China investigating imports of European products like brandy and pork, while the EU scrutinizes Chinese subsidies for solar panels, wind turbines, and trains.