EU votes to impose tariffs on Chinese EVs

European automaker stocks rallied Friday following the European Union's decision to impose new tariffs on electric vehicles (EVs) manufactured in China. The measures, which could remain in effect for up to five years and reach up to 45%, come after an EU investigation concluded that China unfairly subsidized its automotive industry.

Morning Brief co-hosts Seana Smith and Brad Smith break down the details.

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This post was written by Angel Smith

Video Transcript

We are watching European automakers today after the EU voted to impose tariffs as high as 45% on EVs made in China, lasting for five years.

Now.

This comes after an investigation found that China unfairly subsidised its industry.

Beijing denying those claims we are seeing actually a move higher in extended hours for some of these Chinese automakers.

But again, ultimately, what this means.

I actually thought that just the conclusion and the divide that we saw within the EU over whether or not this should be imposed is worth pointing out because the EU is pressing on.

But it is important that actually the bloc's largest economy, Germany rejected these tariffs and that really exposes this risk.

This rift right now over the biggest trade route here with Beijing in a decade.

So ultimately, what this means here for so many of these companies going forward for the Chinese automakers, whether or not prices are going to then be passed down to the consumer.

How large a price increase consumers could be facing as a result of this and how tougher it could be for these Chinese automakers to compete within Europe, I think are big questions for investors at this point, just a larger part of their anti subsidy investigation.

Of course, China has been putting forward major subsidies for the vehicles that are produced within that region and sold within that region and trying to sell them and making sure that it's also one of the stimulative efforts that's taking place within that country and within the region as well.

Here and the EU crackdown, they're kind of working with China.

It still seems in parallel to explore an alternative solution that would have to be fully WTO compatible here and adequate in addressing the what they call injurious subsidisation established by the commission's investigations here.