Information
The European Commission announced on Wednesday that it will impose provisional anti-subsidy duties on imports of Chinese electric vehicles, ranging from 17.4% to 38.1%, depending on the manufacturer. The duties are a response to what the Commission perceives as a threat to the economic interests of electric car producers within the European Union due to Chinese subsidies. These provisional levies are scheduled to take effect on July 4, 2024, with the investigation into anti-subsidy measures set to continue until November 2. Following this period, “definitive duties,” typically lasting five years, will be applied. The rates for these definitive duties will be 21% for companies that cooperate with the investigation and 38.1% for those that do not.
China has expressed its disapproval of the EU’s actions, stating that it will closely monitor the situation and take necessary measures to protect the legitimate rights of Chinese companies. Prior to the announcement, China warned that such tariffs would harm Europe’s own interests and contravene the principles of a market economy and international trade rules. The Chinese Ministry of Commerce emphasized that these measures would also negatively impact China-EU economic and trade cooperation and the stability of the global automobile production and supply chain. Within the EU, there is internal disagreement, with Germany, a major trade partner of China and a significant player in the automobile sector, expressing concern that the tariffs could harm German companies. German Transport Minister Volker Wissing has criticized the move, warning of a potential “trade war” with Beijing and arguing that the tariffs could negatively impact the competitiveness of the German automobile industry.
Source: dpa, Reuters, AP
So what
While it is possible this move would lead to a trade war with China, it is also likely that without some kind of tariff China would attempt to flood the EU market with cheaper alternatives. Western manufacturers are highly likely at a significant disadvantage due to labour laws, something China cares little about.
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