Türkiye will impose a 40% additional tariff on imports of vehicles from China to halt a possible deterioration of its current account balance and to protect domestic automakers, the Trade Ministry said on Saturday.

China is facing increasing trade pressures worldwide over its growing exports of electric vehicles (EVs), which many countries claim are being heavily subsidized by Beijing to support its sputtering economy.

The European Commission is expected to announce next week whether to impose provisional extra tariffs.

The additional Turkish tariff will be set at a minimum of $7,000 per vehicle, with effect from July 7, a presidential decision published in the country's Official Gazette showed.

"An additional tariff will be imposed on the import of conventional and hybrid passenger vehicles from China in order to increase and protect the decreasing share of domestic production," the Trade Ministry said.

In a statement, the ministry also said the additional tariff decision was made taking into account deficit targets and efforts to encourage domestic investment and production.

The decision said if the 40% tariff calculated from the price of an imported vehicle is under $7,000 then the minimum tariff of $7,000 will be charged.

It said the additional tariff (IGV) would be implemented with customs duties on certain goods imported from non-EU members and countries with which Türkiye has no free trade agreement (FTA).

The ministry stated that the decision to introduce these additional customs duties was made considering economic and commercial developments as well as sectoral needs.

In 2023, Türkiye imposed additional tariffs on electric vehicle imports from China and brought some regulations regarding EV maintenance and services. The decision in question came at the time when the country's first domestically produced EV, Togg, was due to launch sales in the domestic market.

The government is encouraging more production and exports to reduce the chronic current account deficit, which stood at $45.2 billion at the end of last year.

The first quarter of the year, however, saw a decline in the annualized current account deficit which authorities attributed to the success of the country's economic program.

The latest decision follows a similar move by the United States, which recently increased tariffs on several Chinese-made goods including electric vehicles and solar cells.

The local auto market contracted by 10.1% in May when compared to the same period last year, according to the recently published data from the Automotive Distributors’ and Mobility Association (ODMD).

Some 100,305 cars and light commercial vehicles were sold in Türkiye last month, ODMD said.

In May, Chinese automakers showed varied performance in the Turkish market, with BYD selling 203 units, Chery selling some 6,208 cars, and MG selling 2,293 units, respectively.