BYD to dodge EU import taxes with $1 billion factory in Turkey

In an effort to avoid unprecedented EU tariffs on imported cars, Chinese carmaker BYD has signed a $1 billion deal to set up a factory in Turkey.

BYD is one of the several Chinese manufacturers currently facing additional import tariffs designed to curb what the European Commission describes as “unfair subsidies” from Beijing. While BYD models are, as of 5 July, being hit with an additional 17.1 per cent duty on top of the regular 10 per cent import tariff (27.1 per cent total), some carmakers, including the likes of MG, are being faced with tariffs of up to 48 per cent.

Now, in a bid to dodge such hefty tariffs that could see the price of BYD’s Dolphin supermini increase by as much as £4,000, the Shenzhen-based brand has signed a deal with the Turkish government to set up a plant by 2026 that will produce as many as 150,000 electric and hybrid vehicles per year and employ as many as 5,000 people.

While Turkey is not part of the European Union per se, it is part of the EU Customs Union and has itself implemented 40 per cent tariffs on Chinese cars in order to protect its own car manufacturing industry.

However, with this new deal, any BYD built in Turkey would not be considered ‘imported’ and would therefore not be liable for the additional import tariffs typically imposed on Chinese cars.

This comes after the EU and China agreed to open negotiations regarding the import charges, stating that a “candid and constructive” phone call had already taken place between the two nations.

The UK government is yet to comment on whether it will mirror the EU’s policy on tariffs for Chinese imports, however, Professor of Business and Sustainability at Cardiff University, Peter Wells previously told Auto Express that the UK’s economic position post-Brexit puts it in a “vulnerable position” on this issue, with the cost of potential tariffs “likely to be passed on to consumers”.

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