EU Replaces Chinese EV Tariffs With Minimum-Price Mechanism

The European Commission on 12 January 2026 issued a guidance document allowing Chinese carmakers to submit price undertakings as an alternative to the import tariffs imposed in October 2024. Those duties ranged from 7.8% to 35.3% depending on the manufacturer and came on top of the standard 10% import duty, introduced to counter what Brussels deemed unfair Chinese subsidies. Under the new mechanism, Chinese producers would be exempt from the extra tariffs if they commit to not selling battery-electric cars in the EU below a defined minimum import price. The guidance also covers sales channels, cross-compensation rules and future investment commitments in Europe. Analysts note that most Chinese EVs are already priced above the expected floor, so the system would largely formalise current pricing rather than force increases. A key difference from the tariff regime is that carmakers could retain the margin between their list price and the agreed minimum, instead of paying duties to the EU. The move marks a step toward de-escalating the trade dispute between Brussels and Beijing.