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

Strategic Insights -

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.