The EU is considering revoking tariffs in China on a key car from Seat-Cupra

BrusselsSeat-Cupra has long maintained that European Union tariffs against cars imported from China These are key to their business model. The automaker has a model, the Tavascan, a 100% electric SUV, manufactured at a Volkswagen Group plant in China, and subject to customs duties of up to 20.7%, a significant blow to the Catalan-based company. However, the European Commission announced this Thursday that it is considering granting an exception to the Volkswagen Group because it does not engage in practices that could constitute unfair competition, which is the reason Brussels raised tariffs on cars manufactured in China. The decision is by no means final, and Brussels is only open to studying it, according to Thursday's Official Journal of the European Union. Thus, the European Commission is now opening a process in which it will discuss the tariff exemption for the Volkswagen Group with all affected parties and will make a final decision in the coming weeks. "All interested parties are invited to make their views known, submit relevant information, and provide supporting evidence under the conditions set out in this notice," states the legal text issued by the European Commission. Seat-Cupra already warned in October 2024, when the EU applied the tariff increase against China, that it was negotiating with the Spanish government and the European Commission to try to lower customs duties. In fact, it has always been optimistic that it would reach an agreement with the European authorities, who have jurisdiction over foreign trade. One of its main arguments is that it is a car that was designed entirely in Spain and is manufactured on a European Volkswagen Group platform, and that all business plans were made when there were no tariffs, duties that were introduced after the car went on sale.

The car company also maintains that the European Union's measure against the Asian giant was intended to curb investment in cheap Chinese cars, but Tavascan is not cheap and argues that it has a European dimension. "The intention was to protect European industry, but in our case, the opposite is happening," criticized Wayne Griffiths, then president of Cupra and Seat.

The European Union's tariffs on the Asian giant, which have severely impacted the Tavascan Cupra model, have already affected Seat's results. Although sales continued to grow in 2025, both profitability and profits plummeted, according to data released by the Martorell-based automaker. Sales increased by 4.1 percent year-on-year in the first nine months of the year, reaching 439,500 vehicles, and the company's revenue grew by 6.9 percent to €11.2 billion. However, the company's operating profit plummeted by 96.2 percent, falling to just €16 million. Furthermore, the return on sales was a meager 0.1 percent, 3.8 percentage points lower than in the same period of the previous year.