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The EU imposes additional tariffs on Chinese tram cars officially into effect! Strong opposition from all parties

2024-07-18 Update From: AutoBeta NAV: AutoBeta > News >


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On July 6, the China Association of Automobile Manufacturers (hereinafter referred to as "China Automobile Association") said that in June, the European Commission (EC) ignored the facts in the disclosure of information on China's electric vehicle countervailing investigation. insist that there are high "subsidies" in China's electric vehicle industry, causing damage to the EU electric vehicle industry, and intend to impose temporary countervailing duties on China's exported electric vehicles. In this regard, the China Association of Automobile Manufacturers deeply regrets and firmly cannot accept it.

The China Automobile Association pointed out in the article: "since the European Commission launched a countervailing investigation into China's electric vehicles in October last year, the Chinese automobile industry has actively cooperated with the investigation in order to maintain the overall safety and stability of the China-EU automobile industry chain. Relevant enterprises have carefully provided materials in accordance with the requirements of the investigation department. However, in the survey, the European side presupposed the survey results, inclined to select sampling enterprises, abused the investigation power, expanded the scope of the investigation at will, and seriously distorted the survey results. " At the same time, the China Automobile Association called on: "it is hoped that the European Commission will not regard the current phased vehicle trade phenomenon necessary for industrial development as a long-term threat, let alone politicize economic and trade issues and abuse trade relief measures. It is necessary to avoid damaging and distorting the supply chain of the global automobile industry chain, including the European Union, and maintain a fair, non-discriminatory and predictable market environment. It is hoped that the EU automobile industry will think rationally and take positive actions to jointly safeguard the current situation of reasonable competition and mutual benefit between the two sides, and jointly promote the healthy and sustainable development of the global automobile industry. "

On June 12 this year, the European Commission officially released a document saying that temporary tariffs will be imposed on electric vehicles from China on July 4, with tariffs of 17.4%, 20% and 38.1% on BYD, Geely Motor and SAIC, respectively, and 21% or 38.1% on other manufacturers. At that time, a number of auto companies, including SAIC and Geely Holdings, expressed disappointment with the decision.

On July 5, the European Commission imposed a temporary countervailing duty on electric vehicles imported from China for a maximum period of four months. In the meantime, EU member states will vote on the final countervailing measures, and once the decision is passed, the EU will formally impose a five-year countervailing duty on Chinese electric vehicles. According to the announcement, the final tax rate is slightly lower, but not by much, compared with the tax rate disclosed on June 12. Among them, BYD kept the tax rate unchanged at 17.4%, while Geely and SAIC reduced from 20% and 38.1% to 19.9% and 37.6% respectively. Other Chinese car companies that cooperated but were not sampled will be subject to a weighted average tariff of 20.8%. The tax rate for uncooperative car companies is 37.6%.

As for the reason for the tariff increase, the European Commission said it was due to high subsidies in China's electric vehicle industry, but this reason was not recognized because China's subsidies for the purchase of new energy vehicles had continued to decline since 2018 and had not completely withdrawn from the market by 2022. After the release of this measure, a number of car companies and Chinese associations have made strong statements. Among them, SAIC issued a statement that in order to effectively safeguard its legitimate rights and interests and the interests of global customers, it will formally request the European Commission to hold a hearing on China's temporary countervailing duty measures on electric vehicles and further exercise its right of defense in accordance with the law.

The China Chamber of Commerce for Import and Export of Mechanical and Electrical products issued a statement saying that the European Commission's move seriously violated the relevant WTO rules and led to an artificial ruling on high countervailing duty rates, which is a naked act of trade protectionism. it is not conducive to the integration and complementary advantages of the China-EU electric vehicle industry, and it strongly urges the European Commission to correct the wrong determination as soon as possible.

The EU-China Chamber of Commerce said that the EU should actively promote the future coordination of technological innovation, infrastructure and mutual recognition of standards in the automotive field between China and the EU, and play a policy supporting and guiding role. The EU-China Chamber of Commerce calls on the EU to return to multilateralism that promotes free trade and global cooperation, rather than resorting to protectionism and imposing high tariffs. He Yadong, spokesman for the Ministry of Commerce of China, also expressed the hope that the European side will face each other, show sincerity, press ahead with the consultation process, and reach a solution acceptable to both sides as soon as possible on the basis of facts and rules. It is also hoped that the European side will seriously listen to the voices of the EU and conduct consultations with the Chinese side in a rational and pragmatic manner, so as to avoid countervailing measures harming the mutually beneficial cooperation and common development of the automobile industry between China and the EU.

In addition, after the European Commission announced the relevant decision, the European auto industry did not buy it and also expressed strong opposition.

The German Association of Automobile Manufacturers stated that it is strongly opposed to the EU imposing countervailing duties on Chinese electric vehicles, saying that the move will have a negative impact on European consumers and enterprises and is not in line with the long-term interests of the European Union. it will also hinder the development of the European electric vehicle market and the realization of climate goals. In addition, German car companies, including BMW, Mercedes-Benz and Volkswagen, have also spoken out one after another, saying that this decision is a wrong decision that does more harm than good for Europe, especially for the German auto industry. Chipze, chairman of BMW Group, said: "the EU's practice of imposing additional tariffs on Chinese electric vehicles is completely unworkable, pointing out that this practice seriously undermines the principle of free trade that the EU has always advocated."

In addition, the EU's move to raise taxes on electric vehicles in China has also attracted widespread opposition from government officials, industry associations and auto companies in Germany. Horst Lecher, a professor at the Frankfurt Institute of Financial Management in Germany, said that the EU's imposition of tariffs on Chinese electric vehicles is not conducive to European economic recovery. German governments, enterprises and academics all believe that trade protection is a lose-lose approach, and enhancing competitiveness is the win-win way.

In an interview with a local radio station, Hungarian Prime Minister Orban said that the EU's plan to impose punitive tariffs on Chinese automakers is wrong and ill-conceived, which will push economic life in the direction of a trade war.

In the face of the temporary countervailing duty levied by the European Union on China's imported electric vehicles, a number of domestic car companies have also responded actively. Xilai Motor said it would closely monitor and follow up the relevant progress and measures of the EU countervailing investigation. At this stage, the pricing of its products on sale will be maintained in the European market, and the market strategy will be evaluated in the light of the progress of the tariff policy. Xiaopeng Motor said: "the company is actively evaluating the feasibility of building local manufacturing capacity in Europe." and take appropriate measures to meet market demand. " At the same time, Xiaopeng promised: "all current consumers waiting for delivery and future customers who place orders before the new tariffs take effect will not be affected by any price increases."

It is also reported that Turkey softened its recent decision to impose tariffs on imports of Chinese cars to encourage automakers to invest, according to a presidential decision published in the official Turkish government Gazette on July 5. The decision amends a decree issued in June to impose no additional taxes on car imports within the scope of investment incentives. Earlier, on June 8, Turkey announced additional import duties of 40 per cent on fuel and hybrid passenger cars originating in China. According to the latest reports, Turkey is preparing to reach an agreement with BYD on a $1 billion electric car factory, which Turkish President Recep Tayyip Erdogan is expected to announce at a ceremony in Manisa province next Monday. the completion of the new plant could make it easier for BYD to enter the European Union. As of press time, BYD has not responded.

It is worth mentioning that although European car companies have begun electric transformation in the past few years, most of them are still in the testing stage. In contrast, Chinese car companies, with the expansion of the new energy vehicle market, China's electric vehicle market is growing rapidly, which also makes European car companies feel unprecedented pressure. According to the Federation of Carriage data, China exported 825000 vehicles to the European market in 2023, an increase of 162% over the same period last year; from January to May this year, it was 444000, an increase of 76% over the same period last year, showing an increasing trend for three consecutive years.

In response to the EU's imposition of tariffs on Chinese electric vehicles, industry insiders believe that European countervailing duties will affect not only Chinese manufacturers, but also European companies and their joint ventures to a greater extent, further making electric vehicles more expensive in the European market, resulting in more losses for car companies and European consumers. People in other industries pointed out that this decision undermines trade rules and harms others and harms themselves, and the EU's countervailing investigation is bound to eat itself up.

Some people in the industry believe that although the European countervailing investigation against Chinese pure electric vehicles may result in additional tariffs of about 20%, due to the strong demand for new energy vehicles in the European market, there is still a time window opportunity for China's new energy exports. Cui Dongshu, secretary-general of the National passenger car Market Information Association, also pointed out: "the EU's move will certainly have a certain impact on Chinese car companies in the short term, but it will not have much impact in the medium to long term."

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