Today the increases in customs duties on the import of Chinese electric cars into the EU come into force, in force for 5 years, and yesterday, the Regulation on the new tariffs has just been published, which establishes the new surcharge beyond the 10% in force until now , Beijing reacted by condemning Brussels’ “protectionist approach”. Confirming the threats of retaliation, on pork, dairy products and brandy (which especially affects French cognac).
CHINA AND EU ACCUSE EACH OTHER each other of not respecting the rules of the World Trade Organization (WTO), of abusing public subsidies, of unfair competition. The EU was divided and in difficulty over the decision to increase customs tariffs on battery-powered cars from China, which have now achieved world leadership.
Germany, which is going through a strong crisis in the auto sector and was a leader in the export of large thermal displacements to China, opposed the increase in customs tariffs, but was unable to build a blocking minority, they also voted against Hungary, Slovakia, Slovenia, Malta, who have defended a sector that employs more than 14 million people in the EU. There was a bloc of ten countries in favor of tariffs, including France, Italy and Poland, determined to defend their industry, while twelve abstained (including Spain and Sweden).
THE INCREASE IN RATES The EU must be placed in the context of a broader clash between the West and China, with the EU risking taking blows from all sides: following the increase in US tariffs on Chinese electric cars, Beijing has doubled exports to Europe , to compensate. But the problem is the delay that the European car sector has taken in the development of the electric car (the production of batteries emigrated to China some time ago), the price of Chinese cars is much lower than that of European ones. Some countries hope to be able to open their arms to Chinese investments to produce in the EU and thus escape tariffs.
The customs increases reach up to 35.3% for car manufacturers, such as SAIC, which “did not cooperate”. The tariff system adopted by the EU varies according to Chinese public subsidies: ranging from a plus 7.8% for the Tesla produced in Shanghai, to a plus 17% for the giant BYD, 18.8% for Geely (which bought the Swedish Volvo), up to 35.3% for Saic. At the last Beijing auto show last May, China presented 278 models, more than 50% electric, of which 117 were new.
THE TREND OF TRADE between China and the EU speaks for itself: foreign cars sold in China are now under 50% and were at 57% only two years ago, while the export of Chinese electric cars to the world has increased by 80% since 2023, according to IEA data (International Energy Agency). In the EU, it went from a 2% market share in 2020 for Chinese electric cars to 14% in the third quarter of this year. From an environmental point of view, according to the IEA, in ten years the shift towards electric cars could allow a reduction of 10 million barrels per day. China has also taken advantage of sanctions against Russia following Ukraine’s aggression, increasing exports by 500% from 2022.
OFFICIALLY, the dialogue between the EU and China “continues”, Trade Minister Wang Wentao hopes to achieve a suspension of the increases, taking advantage of European divisions. The German car lobby yesterday denounced the risk of a “commercial conflict” to the detriment of Europe.
