BYD's Circumvention of European Tariffs: Implications for EU Industry

The Chinese carmaker BYD is reportedly using Turkey to circumvent European tariffs on Chinese electric cars, sparking concerns over the impact on European industry. According to a Reuters article, BYD will import necessary parts into Turkey with zero tariffs, where final assembly will be carried out before being exported to the EU. This practice is seen as a way for Chinese companies to avoid tariffs of 27% imposed on electric cars in the EU to address anti-competitive practices.

Key Takeaways:

• BYD, a Chinese carmaker, is using Turkey to circumvent European tariffs on Chinese electric cars, as reported by a Reuters article.
• Turkish tariffs allow BYD to import necessary parts with zero tariffs, enabling it to avoid EU tariffs of 27% on electric cars.
• The practice is seen as a way for Chinese companies to avoid tariffs imposed on electric cars in the EU to address anti-competitive practices.
• The European Commission is aware of this practice, with a written answer from the Commission acknowledging the issue on August 4, 2025.
• The Commission intends to address the issue by creating favourable production conditions within the EU, reducing energy costs for European industry, one of the most significant problems for EU industry.
• The use of Turkey as a gateway to circumvent EU tariffs may set a precedent for other Chinese companies, potentially destabilizing the European automotive market.
• EU industry and policymakers are demanding action to protect European industry against the practices of Chinese companies, emphasizing the need for strengthened production within the EU.
• The Turkish-EU bilateral agreement on tariffs and trade may be under scrutiny, with potential implications for future trade agreements between the two regions.

Statistics:

• 27%: The EU tariff imposed on electric cars from China to address anti-competitive practices.
• Zero tariffs: The Turkish tariff rate that allows BYD to import parts without additional costs.
• 4 August 2025: The last updated date for the written answer from the European Commission addressing the issue.
• 22.7.2025: The submission date for the question to the European Commission.
• 25% of total EU imports: The estimated share of Chinese electric vehicles in the EU market, highlighting the importance of the issue.

Sources:

• A written answer from the European Commission, submitted on 22.7.2025, and updated on August 4, 2025.
• Reuters article, exact date not specified.