In a strategic move to invigorate its electric vehicle (EV) industry, Türkiye has announced a significant reduction in import tariffs on EVs from the Chinese mainland. This policy shift aims to attract Chinese automakers to invest in local production facilities, thereby strengthening Türkiye's domestic auto sector.
On July 5, a presidential decree was published in the Official Gazette, lowering the additional tariffs on imported Chinese vehicles from 40 percent to the standard 10 percent tariff. Moreover, carmakers that commit to investing in Türkiye will receive an exemption from these tariffs, making the Turkish market more appealing to Chinese manufacturers.
Chinese car imports have been steadily increasing, now capturing a 10 percent market share in Türkiye. By easing the tariff burden, the Turkish government hopes to encourage these manufacturers to establish production bases within the country. This not only benefits the local economy but also leverages Türkiye's proximity to the European Union (EU), where Chinese automakers are currently facing new rounds of tariffs.
Last March, Türkiye had imposed a hefty 40 percent additional tariff on EVs imported from the Chinese mainland, pushing the total tariff rate to 50 percent. This policy was further expanded on June 8 to include all Chinese imported vehicles and auto parts, setting a minimum tariff of $7,000 effective July 7.
China's Ministry of Commerce (MOFCOM) expressed strong dissatisfaction with the additional tariffs, stating that such measures contravene World Trade Organization (WTO) rules. The MOFCOM further highlighted that these policies harm the interests of businesses on both sides and negatively impact Turkish consumers.
Industry insiders suggest that Türkiye's latest tariff exemption is a calculated effort to pressure Chinese automakers into investing locally. By offering reduced tariffs to those willing to set up production facilities in Türkiye, the government aims to bolster its own automotive industry while maintaining healthy trade relations.
Additionally, Türkiye's customs union agreement with the EU was complemented last week by provisional duties of up to 38 percent on Chinese EV imports, as reported by Hürriyet Daily News. This dual approach underscores Türkiye's commitment to balancing local industry growth with international trade dynamics.
Negotiations are currently underway with several Chinese companies that are nearing investment commitments. These agreements, once finalized, will grant the tariff exemptions. However, Turkish regulations stipulate that failing to invest within the designated timeframe will result in the withdrawal of these benefits, ensuring that the incentives lead to genuine economic contributions.
By fostering a more favorable environment for Chinese EV manufacturers, Türkiye aims to position itself as a key player in the global electric vehicle market, driving innovation and sustainable growth within the region.
Reference(s):
cgtn.com
