The Paris Motor Show takes place this week and the big subject of discussion among the car makers that have returned to the show in big numbers are the tariffs that the EU has decided to impose on electric vehicles made in China. 

Tariffs of up to 45% are to be imposed by the EU in response to what it believes are unfair subsidies given to Chinese vehicle makers by the Beijing government. Tariffs were first imposed during the summer, but the latest EU vote has seen these charges put in place from 5 years. Tariffs vary by manufacturer and the calculation is based on estimates of how much Chinese state aid each manufacturer receives. 

The proposals have split EU countries, with German in particular, not wanting them in place as the country exports many cars to China and fears a trade war. However, support from countries such as France, Italy, the Netherlands and Poland saw the proposal approved. 

It is unclear how the tariffs will impact the prices of imported Chinese vehicles at present. Up to now makes such as BYD, Geely, Great Wall Motor and SAIC have resisted price rises meaning they are able to undercut European brands.  

Chinese automakers have also started to invest in European production facilities so that they can avoid such issues in the future. The European market is especially important to Chinese manufacturers as high tariffs have effectively excluded them from the US market.