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Intense negotiations likely to continue

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Beijing has said will protect its interests

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Volkswagen critical of EU announcement

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Tariffs are far lower than planned US tariffs

(Adds trade chief comments in paragraphs 7, 8, 11 and 12, VW

comment in 19, 20, background in 26 and 27)

By Philip Blenkinsop and Charlotte Van Campenhout

BRUSSELS, July 4 (Reuters) - The European Union will

impose tariffs of up to 37.6% from Friday on imports of electric

vehicles made in China, EU officials said, ratcheting up

tensions with Beijing in Brussels' largest trade case yet.

There is however a four-month window during which the

tariffs are provisional and intensive talks are expected to

continue between the two sides as Beijing threatens wide-ranging

retaliation.

The European Commission's provisional duties of between

17.4% and 37.6% without backdating are designed to prevent what

its president Ursula von der Leyen has said is a threatened

flood of cheap EVs built state subsidies.

The rates, laid out in a 208-page document published on

Thursday, are almost exactly the same as those announced by the

Commission on June 12. The executive made slight adjustments

after companies identified minor calculation errors in the

initial disclosure.

Beijing said then it would take "all necessary measures" to

safeguard China's interests.

These could include retaliatory tariffs on exports to China

of products such as cognac or pork.

EU trade chief Valdis Dombrovskis said there is no basis for

China to retaliate.

"Our aim is to ... ensure fair competition and level playing

field," he said in an interview with Bloomberg.

The EU anti-subsidy investigation has nearly four more

months to run.

At the end of it, the Commission, the EU's executive arm,

could propose "definite duties", typically applying for five

years, on which EU members would vote.

"Those talks with China are ongoing and indeed should a

mutually beneficial solution emerge, we can also find ways not

to apply at the end of the day the tariffs," Dombrovskis said.

"But it is very clear this solution (would) need to solve

that market distortion that we are currently having ... and it

needs to be market compliant."

China's commerce ministry said on Thursday both sides have

so far held several rounds of technical talks over tariffs on

the issue.

"We hope that the European and Chinese sides will move in

the same direction, show sincerity, and push forward with the

consultation process as soon as possible," He Yadong, a ministry

spokesperson, said.

BYD will face duties of 17.4%, Geely

19.9% and SAIC 37.6%, the EU said on Thursday. These are on top

of the EU's standard 10% duty on car imports.

Companies deemed by the EU to have cooperated with the

anti-subsidy investigation, including western carmakers Tesla

and BMW, will be subject to 20.8% tariffs and

those that did not cooperate a rate of 37.6%.

CRITICISM

Europe's biggest carmaker Volkswagen was swift

to criticise Thursday's announcement.

"The negative effects of this decision outweigh any benefits

for the European and especially the German automotive industry,"

a Volkswagen spokesperson said in a statement.

Auto industry executives have warned against the tariffs,

fearful of counter-tariffs or other measures that could affect

the competitiveness of their cars in China when they are already

struggling to keep up with a growing number of domestic

competitors in the EV market.

German carmakers made a third of their sales last year in

China.

The Commission has estimated Chinese brands' share of the EU

market has risen to 8% from below 1% in 2019 and could reach 15%

in 2025. It says prices are typically 20% below those of EU-made

models.

WAVERING EU SUPPORT

European policymakers are keen to avoid a repeat of what

happened with solar panels a decade ago, when the EU took

limited action to curb Chinese imports and many European

manufacturers collapsed. The EU launched its anti-subsidy

investigation into Chinese EVs last October.

The issue will be put to EU members in an advisory vote in

the coming weeks, the first official test of support in the

Commission's case, which is the first trade case of this kind.

Although the Commission initiated its investigation without

an industry complaint, members are wavering over whether to back

the additional tariffs, highlighting Brussels' challenge in

getting support for the case.

The Chinese Passenger Car Association has said the tariffs

will have a modest impact on the majority of Chinese firms.

The rates are far lower than the 100% tariff Washington

plans to apply to Chinese EV imports from August.