The EU's Anti-Subsidy Investigation Against Chinese Battery Electric Vehicle Imports
Industrial Policy and Geopolitics in Disguise? - Updated Version of a IEP@BU Polcy Brief
The EU is encouraging other countries to follow its lead and support the green transition. This requires massive subsidies in many different sectors. Why should the EU then complain if other countries outcompete it in terms of subsidising the production of green goods?
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Executive Summary
In late 2024, the EU Council of Ministers approved a proposal from the Commission to impose a range of anti-subsidy tariffs on imports of battery electric vehicles (BEV) from China. The tariffs range from 7 % to 35 % and will be in force for 5 years.
China is challenging these duties in the WTO. This paper considers both the economic and the legal aspects of this case, which combines three unique features:
1. The first own initiative ASTDI anti-subsidy investigation.
2. The first EU anti-subsidy investigation that is not accompanied by anti-dumping.
3. The first EU ASTDI for a product for which the EU is a net exporter. The economic case for these duties appears weak, given that at the time of the investigation, the EU BEV industry appeared healthy and the EU maintains an important trade surplus in BEVs.
Moreover, EU consumers pay much higher prices for the BEVs imported from China than Chinese consumers – the opposite of dumping.
Direct public subsidies to Chinese BEV producers in the form of grants and tax breaks are relatively small. The Commission motivates a large part of the countervailing duties (CVD) with the argument that entire markets in China are so distorted by industrial policies that the Chinese BEV producers do not face market prices for credit and batteries
Daniel Gros
Daniel Gros is Director of the Institute for European Policymaking @ Bocconi University.
Between 2020 and 2022, he was Distinguished Fellow and Member of the Board of the Centre for European Policy Studies (CEPS). Before that, he was the director of CEPS from 2000. In 2020, he held a Fulbright fellowship and was a visiting professor at the University of California, Berkeley.
Weinian Hu
Weinian Hu is a Research fellow at the Centre for European Policy Studies (CEPS). Weinian Hu’s career has bridged Asia and Europe at the intersection of academia, diplomacy, and industry. In addition to her academic pursuits in international trade law, she acquired extensive international experience by working with a global bank in China, an intergovernmental organization in Singapore, a non-governmental organization in Malaysia, and a global-leading public affairs agency in Belgium. Dr Hu holds degrees from Chinese, Britis,h and Belgian universities.
The IEP@BU Mission
Founded by Bocconi University and the Institute Javotte Bocconi, the Institute for European Policymaking @ Bocconi University combines the analytic rigor of a research institute, the policy impact of a think tank, and the facts-based effort of raising public opinion’s awareness about Europe through outreach activities. The Institute, fully interdisciplinary, intends to address the multi-fold obstacles that usually stand between the design of appropriate policies and their adoption, with particular attention to consensus-building and effective enforcement.
The Institute’s mission is to conduct, debate, and disseminate high-quality research on the major policy issues facing Europe, and the EU in particular, its Member States, and its citizens, in a rapidly changing world.
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The IEP@BU Management Council
Catherine De Vries, IEP@BU President
Daniel Gros, IEP@BU Director
Arnstein Assve, Professor in Demography at Bocconi University
Sylvie Goulard, IEP@BU vice-President, Professor of Practice in Global Affairs at SDA Bocconi School of Management
Silvia Colombo, IEP@BU Deputy Director
Carlo Altomonte, Associate Professor at Bocconi University and Associate Dean for Stakeholder Engagement Programs at SDA Bocconi School of Management
Valentina Bosetti, professor of Environmental and Climate Change Economics at Bocconi University
Elena Carletti, Dean for Research and Professor of Finance at Bocconi University
Eleanor Spaventa, Professor of European Union Law at Bocconi Law School
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