On September 13th, the European Commission (EC) announced that it will be initiating a countervailing duty (i.e., anti-subsidy) investigation concerning electric vehicles (EVs) from China. The announcement was made by the President of the EC, Ursula von der Leyen, during the State of the Union address. She stated that “global markets are now flooded with cheaper Chinese electric cars” whose “price is kept artificially low by huge state subsidies”, and “[t]his is distorting” the EU market.

Once initiated, the investigation will be completed within 13 months. In the course of the investigation, the EC will need to gather evidence to (i) identify and quantify countervailable subsidies granted specifically to the Chinese EV industry and/or specific manufacturers in China, and (ii) determine whether imports of subsidized EVs from China have caused material injury to the EU EV industry or are threatening to cause such injury. Automotive manufacturers and the governments of EV-producing countries throughout the world will be closely monitoring the EC’s factual findings and legal determinations.

Authors: Greg Tereposky, Daniel Hohnstein, Jack Bowness

Tereposky & DeRose LLP regularly provides advice and acts as counsel in international trade disputes, including trade remedy matters. If you have any questions about the foregoing subject, please do not hesitate to contact us.