In response to the European Union's recent tariffs on electric vehicles, China has initiated an investigation into the import of specific dairy products from the EU.

The EU's tariffs include a significant 36.3% on SAIC, 19.3% on Geely, and 17% on BYD, all exceeding the new rate set for Tesla.

Tesla's tariff rate was recalculated following its request, which was influenced by the subsidies it received from China.

The Chamber of Commerce will oversee the investigation, stressing the need for fairness and transparency throughout the process.

Automakers have the opportunity to request hearings and must submit their feedback within ten days of the announcement regarding the tariffs.

A final decision on the tariffs is anticipated by the end of October, with the rates set to apply for five years without retroactive measures.

EU officials have expressed willingness to negotiate a solution that avoids tariffs, emphasizing that China must propose alternatives.

The China Chamber of Commerce to the EU contends that there is insufficient evidence to prove that Chinese electric vehicles harm the European market.

Despite Tesla's favorable tariff situation, its relationship with the EU has been strained, particularly regarding online safety issues.

Investors are advised to keep an eye on companies like BYD, Li Auto, XPeng, NIO, and Geely in light of these evolving trade dynamics.

Brussels aims to mitigate the competitive edge provided by state subsidies from China while making minor adjustments to the proposed tariffs.

Tesla shares saw a slight increase in pre-market trading, although the stock has faced a 10% decline throughout 2023.