The European Union has approved a tariff increase on Chinese electric vehicles, according to the report from Agence France-Presse. Politicians and industry representatives from several European countries had previously expressed opposition to the European Commission’s investigation, and China also condemned the EU’s move to impose additional tariffs on Chinese electric vehicles as a typical act of protectionism.
Several European diplomats told Agence France-Presse that despite strong opposition led by Germany, the EU still approved the imposition of high tariffs on Chinese electric vehicles. According to the report, 10 countries, including France and Italy, supported the imposition of a tariff of up to 35.3% on top of the existing 10% tariff. Five countries, including Germany and Hungary, voted against, and another 12 countries abstained.
According to EU decision-making procedures, if 15 member states (accounting for 65% of the EU’s population) vote against, the plan to impose additional tariffs would be shelved. Otherwise, the EU will impose additional tariffs ranging from 7.8% to 35.3% on top of the standard 10% import tariff for cars imported from China.
Source: Huanqiu Read The Article
PSR Analysis: The current automobile import tariff in Europe is 10%, which means that Chinese electric vehicle manufacturers entering the European market could face a maximum tariff of up to 45.3%.
Although Europe has actively embraced the clean energy automotive industry, its electric transformation has been relatively slow compared to that of China. Under such circumstances, some EU member states hope that tariffs will protect the European electric vehicle industry, slowing the external impact; at the same time, they hope that Chinese car companies will bring some cutting-edge technologies and the electric vehicle industry chain to Europe, promoting the electric transformation of European cars, just like the effect caused by Tesla coming to China.
Although imposing tariffs will reduce the price advantage of Chinese car companies, part of the tariff will be passed on to consumers, harming the interests of European consumers.
Moreover, imposing tariffs will also restrict the supply of electric vehicles to European consumers, thus delaying the low-carbon development process of the European transportation industry. and at the same time.
At the same time, this move will weaken the competitiveness of the industry in the long run for companies like Mercedes-Benz Group and BMW Group. Free trade and fair competition can bring prosperity, growth, and innovation to all parties. However, increasing tariffs may harm businesses that are actively operating globally, such as those exporting high-end models to the Chinese market. Large-displacement luxury cars especially may be impacted in this trade conflict. PSR
Jack Hao is Senior Research Manager – China for Power Systems Research
