EU Slaps Chinese Electric Cars with Tariffs of up to 38%

A European Commission probe launched last year concluded that state subsidies for Chinese EV manufacturers were unfairly undercutting European rivals © STR / AFP/File
A European Commission probe launched last year concluded that state subsidies for Chinese EV manufacturers were unfairly undercutting European rivals © STR / AFP/File
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EU Slaps Chinese Electric Cars with Tariffs of up to 38%

A European Commission probe launched last year concluded that state subsidies for Chinese EV manufacturers were unfairly undercutting European rivals © STR / AFP/File
A European Commission probe launched last year concluded that state subsidies for Chinese EV manufacturers were unfairly undercutting European rivals © STR / AFP/File

The European Union on Thursday slapped extra provisional duties of up to 38 percent on Chinese electric car imports because of Beijing's "unfair" support, a move that risks escalating tensions with Beijing.
A European Commission probe launched last year concluded that state subsidies for Chinese EV manufacturers were unfairly undercutting European rivals -- which Brussels wants to shield as they make the transition from thermal to electric power, AFP reported.

The Chinese Chamber of Commerce to the EU slammed the tariffs, coming on top of current import duties of 10 percent, as "politically-motivated" and "protectionist", while voicing hope the dispute could yet be resolved through dialogue.

Europeans are split on the move, with Germany and its homegrown auto champions, who do significant trade with China, fearing it will do more harm than good if it leads to a clampdown on EU exports as Beijing has already threatened.

German auto giant Volkswagen slammed the move as "detrimental" while the head of BMW said the tariff battle "leads to a dead end".

France and Italy have pushed for tariffs on Chinese EVs -- whose EU market share has skyrocketed -- but Sweden like Germany has expressed reservations, while Hungary is outright opposed.

The provisional tariffs kick in from Friday, with definitive duties to take effect in November for a five-year period, pending a vote by the EU's 27 states.

"Our investigation... concluded that the battery electric vehicles produced in China benefit from unfair subsidisation, which is causing a threat of economic injury to the EU's own electric car makers," the EU's trade chief Valdis Dombrovskis said.

In response, the commission imposed provisional duties on major Chinese manufacturers including 17.4 percent for market major BYD, 19.9 percent for Geely and 37.6 percent for SAIC.

Other producers in China that cooperated with Brussels will face a tariff of 20.8 percent, while those that did not would be subject to the maximum 37.6 percent duty.

US tech billionaire Elon Musk's Tesla -- which manufactures in China -- is the only electric automaker to have asked Brussels for its own duty rate, to be calculated based on evidence it has submitted.

The Tesla Model 3 would be affected as well as the electric Mini, the Volvo EX40 and all other non-Chinese branded cars made in China.
The move comes despite the opening of talks between Chinese and EU trade officials, and trade chief Dombrovskis said Brussels will continue "to engage intensively with China on a mutually acceptable solution".

China's electric car maker Nio said it still hoped for a resolution with the EU, while fellow EV maker XPeng said it would "find ways to minimise the impact on consumers" without changing its international strategy.

EU officials have indicated that, should a negotiated solution emerge, they may not ultimately need to levy the tariffs.

But Dombrovskis cautioned that "any negotiated outcome to our investigation must clearly and fully address EU concerns and be in respect of WTO rules."

Cui Dongshu, secretary-general of the China Passenger Car Association, told AFP the move "would obviously have a negative impact on the development of China's EV industry, especially its development in the EU in the short term."

Beijing has already signalled its readiness to retaliate by launching an anti-dumping probe last month into pork imports, and Chinese media suggest further probes could be in the works.
The United States has already hiked customs duties on Chinese electric cars to 100 percent, while Canada is considering similar action.

But Brussels faces a delicate balancing act as it seeks to defend Europe's auto industry -- the jewel in its industrial crown -- while both avoiding a damaging showdown with China and meeting its targets for slashing carbon emissions.

The EU aims for Europeans to switch massively to electric vehicles as it plans to outlaw the sale of new fossil fuel-powered cars from 2035.

Chinese-made EVs' market share in the EU climbed from around three percent to more than 20 percent in the past three years, according to the European Automobile Manufacturers' Association.

Chinese brands account for around eight percent of that share, it said.

Germany's Kiel Institute for the World Economy, alongside Austrian institutes, predicted the provisional higher taxes would reduce vehicle imports from China by 42 percent.

Electric car prices could rise by an average of 0.3 to 0.9 percent in the EU, they added.

German auto manufacturers fear any retaliation could hurt their activities in China.

Duties were "generally not suitable for strengthening the competitiveness of the European automotive industry in the long term -- we reject them", Volkswagen said.



Türkiye and Iraq Discuss Energy Cooperation Ahead of Pipeline Deal Expiry

A general view of Türkiye's Mediterranean port of Ceyhan, Adana, southern Türkiye, Feb. 19, 2014. (Reuters)
A general view of Türkiye's Mediterranean port of Ceyhan, Adana, southern Türkiye, Feb. 19, 2014. (Reuters)
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Türkiye and Iraq Discuss Energy Cooperation Ahead of Pipeline Deal Expiry

A general view of Türkiye's Mediterranean port of Ceyhan, Adana, southern Türkiye, Feb. 19, 2014. (Reuters)
A general view of Türkiye's Mediterranean port of Ceyhan, Adana, southern Türkiye, Feb. 19, 2014. (Reuters)

Türkiye's ‌Energy Minister Alparslan Bayraktar said on Wednesday that he met senior Iraqi oil and foreign ministry officials to discuss energy cooperation, including on the Iraq-Türkiye Crude Oil Pipeline that runs from Kirkuk to Ceyhan.

The decades-old Türkiye-Iraq Crude Oil ‌Pipeline Agreement, which governs ‌exports through the ‌pipeline, ⁠is due to ⁠expire on July 27. Baghdad and Ankara are still discussing a new draft agreement.

The Iraqi delegation included Deputy Foreign Minister Hussein Bahr Al-Uloom, Deputy ⁠Oil Minister Naser Azez ‌Jabbar, and ‌Iraq's Ambassador to Ankara Majid Al-Lachmawi.

Bayraktar said in a ‌post on X that Türkiye aims to work closely with the new Iraqi government on more effective ‌use of existing energy infrastructure.

Türkiye also seeks to ⁠support ⁠existing infrastructure with new connections, Bayraktar said.

Baghdad last month asked Ankara to extend the pipeline agreement for at least a year to allow time for more talks, but Ankara said it does not want an extension under current conditions.


Gold Falls as Higher Treasury Yields, Fed Rate Hike Bets Weigh

Gold bracelets and necklaces displayed for sale in a gold shop at Istanbul's Grand Bazaar (AFP)
Gold bracelets and necklaces displayed for sale in a gold shop at Istanbul's Grand Bazaar (AFP)
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Gold Falls as Higher Treasury Yields, Fed Rate Hike Bets Weigh

Gold bracelets and necklaces displayed for sale in a gold shop at Istanbul's Grand Bazaar (AFP)
Gold bracelets and necklaces displayed for sale in a gold shop at Istanbul's Grand Bazaar (AFP)

Gold fell for a third consecutive session on Wednesday, as rising US Treasury yields and growing bets that the Federal Reserve will raise interest rates pressured the non-yielding metal.

Spot gold was down 0.8% at $3,974.75 per ounce as of 0849 GMT, after touching its lowest level since last November at $3,942.99 in the previous session. US gold futures for August delivery lost 1.3% to $3,987.70/oz.

The yellow metal ‌on Tuesday recorded ‌its first quarterly loss since January 2024, Reuters reported.

A selloff ‌in ⁠US Treasuries on ⁠Tuesday pushed the benchmark 10-year yield up as much as 9 basis points before it backed off the highs. By Wednesday, yields were rising again, up 4 bps at 4.465%, outpacing increases in euro zone bond yields.

A stronger US dollar makes bullion less affordable for overseas buyers.

"The weakness is a bit driven by comments from ⁠Fed's Hammack, suggesting a rate hike might be ‌needed and market participants pricing in ‌a bit more rate hikes for this year," said UBS analyst Giovanni Staunovo. Federal ‌Reserve Bank of Cleveland President Beth Hammack said on Tuesday ‌she may advocate for higher rates if inflation pressures don’t moderate. According to CME FedWatch tool, traders see a nearly 67% chance of a rate hike by September.

Expectations for more hikes are not helping investment demand, and ‌ETF holdings have seen renewed outflows in recent days, said Staunovo, noting that price volatility is ⁠expected around economic ⁠data releases this week.

June ADP employment data, due at 1215 GMT, and Thursday's nonfarm payrolls report could give further clues on the Fed's policy path.

Markets will also closely watch the European Central Bank's annual Sintra conference on Wednesday, where Fed Chair Kevin Warsh and ECB President Christine Lagarde are due to speak. On the geopolitical front, concerns persisted over the prospects for US-Iran diplomacy after Tehran said it would not meet senior US envoys who travelled to the region following the recent outbreak of hostilities.

Spot silver fell 1.4% to $57.75 per ounce.

Platinum slipped 0.6% to $1,542.70, after hitting its lowest point since November. Palladium slid 1.4% to $1,187.01.


Turkish Manufacturing Contracts, Hit by Iran War Disruption, PMI Shows

 A full moon rises over the Galata Tower in Istanbul, Türkiye, June 29, 2026. (Reuters)
A full moon rises over the Galata Tower in Istanbul, Türkiye, June 29, 2026. (Reuters)
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Turkish Manufacturing Contracts, Hit by Iran War Disruption, PMI Shows

 A full moon rises over the Galata Tower in Istanbul, Türkiye, June 29, 2026. (Reuters)
A full moon rises over the Galata Tower in Istanbul, Türkiye, June 29, 2026. (Reuters)

Türkiye's manufacturing ‌sector contracted in June as the war in the Middle East disrupted demand and supply, a business survey showed on Wednesday.

The Istanbul Chamber of Industry's Türkiye Manufacturing Purchasing Managers' Index, compiled by S&P Global, fell to 47.1 in June from 49.8 in May. The 50-mark separates growth from contraction.

Output returned to decline after rising slightly in May, with firms ‌citing market uncertainty ‌linked to the conflict ‌in ⁠the Middle East, softer ⁠new orders and higher prices.

Demand weakened further, with total new orders posting a solid decline and new export business also falling again after expanding in May.

Companies also cut purchasing activity, while employment continued to be scaled ⁠back. Suppliers' delivery times lengthened again, although ‌the deterioration was ‌the least marked since February.

There were some signs ‌of easing price pressures. Input cost inflation slowed ‌for a second straight month to its weakest since November, while output price inflation eased to its lowest level so far this year.

The June ‌survey reversed some of May's improvement and extended the sector's downturn to ⁠27 ⁠consecutive months. Firms also reduced stocks of purchases and finished goods amid muted demand conditions, the panel showed.

"The Turkish manufacturing sector took a step back in June, posting a renewed softening of production amid muted new orders. Anecdotal evidence from the survey indicated that the war in the Middle East continued to be the principal cause of the challenges facing firms," said Andrew Harker, economics director at S&P Global Market Intelligence.