The EU has announced tariffs of up to 38% on imports of Chinese electric vehicles (EVs), triggering duties of more than €2 billion ($2.16 billion) a year, and a potential trade war with China, reports The Guardian.

The tariffs will be applied provisionally from July, in line with World Trade Organization rules, which give China four weeks to challenge any evidence the EU has offered in order to justify the duties on imported EVs.

The announcement came after a nine-month investigation into alleged unfair state subsidies enjoyed by Chinese battery electric vehicles (BEVs) including top brands such as BYD and Geely, which has part ownership of Swedish brand Polestar, and Shanghai’s SAIC, which owns the British brand MG.

“The provisional findings of the EU anti-subsidy investigation indicate that the entire BEV value chain benefits heavily from unfair subsidies in China, and that the influx of subsidized Chinese imports at artificially low prices therefore presents a threat of clearly foreseeable and imminent injury to EU industry,” the EU said in a statement.

Under the plan, the EU will apply five levels of tariffs. EV manufacturers that cooperated with Brussels investigators will face a tariff of 21%, while those who did not will be hit with the top tier of 38.1%.

European manufacturers are also bracing themselves for retaliatory measures from China, in the form of a range of duties on its exports, including vehicles, but also other products, from French cognac to dairy products.