The European Commission will impose extra duties of up to 38.1% on Chinese electric vehicles starting in July, in response to excessive subsidies, risking retaliation from Beijing. This move follows the US’ decision to quadruple duties on Chinese EVs to 100%. The new EU tariffs will significantly increase costs for Chinese carmakers like BYD and SAIC. European automakers, facing competition from cheaper Chinese EVs, see this as a shift in EU trade policy to protect its market. Shares of European carmakers fell due to fears of Chinese retaliation. The outcome depends on whether Beijing retaliates or negotiates a solution.