The European Union has approved import tariffs of up to 38.1% on Chinese electric vehicles.

The tariffs aim to support the EU's EV supply chain and promote locally-made electric cars.

The European Commission estimates the tariffs could generate over €2 billion annually.

Tariffs, up to 25%, address subsidies that give Chinese EV manufacturers an unfair advantage.

The decision has led to a 1.3% drop in European shares, with automakers expressing concerns.

France and Spain support the move for increased EU budget revenue, opposed by Germany, Sweden, and Hungary fearing Chinese retaliation.

Affected companies include BYD, Geely, SAIC, and potentially Tesla, with billions in additional costs expected.

China criticizes the tariffs as protectionist and vows necessary measures in response.

The EU Trade Commissioner emphasizes the importance of fair competition in the EV sector.

Provisional duties will take effect by July 4, with definitive duties by November 2, and final decision for a five-year period pending member state votes.

Green advocacy group Transport & Environment welcomes the tariffs but calls for a broader industrial policy to support EV transition.

Maintaining the EU's CO2 goals, including the 2035 zero-emission target, is crucial for encouraging the EV transition.

T&E also calls for an EU investment plan to enhance EV and battery manufacturing.

The market reacts to Euro zone industrial production contraction, rising inflation in Spain, and political uncertainty in France.

Stock declines seen for Wise and Lufthansa, while gains noted for Halma and Valmet.