Navarro warns EU's 17% tariff on BYD fails to slow Chinese EV surge

The EU's 17 percent countervailing duty on BYD has failed to slow the Chinese automaker's advance into Europe, White House senior trade adviser Peter Navarro said, urging Western governments to adopt far stronger measures to protect their domestic auto industries.

"BYD is a pirate ship with a balance sheet, weakening both Europe's and America's industrial bases, one cheap EV at a time," Navarro wrote in a Politico Europe opinion piece published Thursday.

BYD sold 4.6 million vehicles in 2025, including about 2.26 million pure battery-electric cars, far outpacing Tesla's roughly 1.6 million deliveries. The company is building its first European factory in Hungary and has received 20 billion forints ($63.7 million) in government assistance for a regional headquarters and research center there.

The warning comes as traditional European automakers buckle under the pressure. Volkswagen plans to cut 35,000 German jobs by 2030 and is considering as many as 100,000 job cuts worldwide, while its China earnings have fallen more than 80 percent over the past decade. Mercedes, BMW and Porsche face similar pressure as the German premium model of engineering cars in-country and selling high-margin vehicles to China breaks down.

Europe's Divided Response

Only 10 of the EU's 27 member countries backed the final countervailing duties on Chinese EVs. Five voted against the measure and 12 abstained, exposing deep divisions within the bloc. Germany, home to Volkswagen, Mercedes, BMW, Audi and Porsche, voted against the tariffs because Beijing could retaliate across its broader export-dependent economy, which includes machinery, chemicals and industrial components.

Other member states had their own reasons to hesitate. Hungary has become a landing zone for Chinese battery and EV investment. Spain and France want Chinese EV plants on their soil. Poland and the Czech Republic remain tied to German supply chains. The fractured response has allowed BYD and its Chinese peers to gain ground, Navarro argued.

"Beijing acts. Brussels deliberates. And BYD drives through the gap," he wrote.

Massing on U.S. Borders

The U.S. is the only major auto market that has kept BYD out, Navarro said, but the company is now encircling it. Mexico imported more than 539,000 vehicles from China in 2025, making it Beijing's largest motor-vehicle export destination. In Canada, Geely's Lotus brand has already entered, while BYD and Chery are seeking approval under a low-tariff quota for Chinese EVs.

Navarro described BYD's business model as "copy, absorb, subsidize, scale, dump and dominate." The company began as a battery maker in 1995 and now produces batteries, motors, electronics, power trains, semiconductors and components under one roof. Its breakout F3 model was a Toyota Corolla clone with Honda characteristics, he noted.

The current average U.S. tariff on Chinese-made vehicles stands at 27.5 percent, combining the standard 2.5 percent passenger vehicle duty with a 25 percent Section 301 national security tariff imposed during the Trump administration. The previous escalation of tariffs on Chinese goods in 2018-2019 reduced bilateral trade by more than $100 billion over two years, according to Census Bureau data.

The EU's 17 percent duty on BYD compares with 21 percent on Geely and 38 percent on SAIC, though the rates vary by company based on the level of cooperation with EU investigators. The European Commission is expected to review the measures within 12 months.

This article is for informational purposes only and does not constitute investment advice.