AUTONEWS

European Union hopes to avoid trade war with China in the electric car sector

The European Union (EU) hopes to be able to find “common ground” to avoid a trade war with China in the electric car sector, in which it threatens to impose tariffs on the import of vehicles from Chinese manufacturers to challenge state subsidies.

“When we see the situation in which China's subsidies distort trade, causing risks to European industry, we have to act, but we act in a considered and WTO [World Trade Organization] compatible way, so we do not see any basis for commercial conflicts”, says in an interview with the Lusa agency in Brussels, the executive vice-president of the European Commission responsible for trade.

A few days after the community executive threatened to move forward with tariffs on the EU's import of electric cars from Chinese manufacturers (brands such as BYD, Geely and SAIC), Valdis Dombrovskis tells Lusa that the community bloc is “available to meet a mutually available solution with China.”

“The imposition of tariffs is not the only possible outcome of this investigation”, he adds, saying he hopes that “common or mutual ground” can be reached, which would include, for example, the withdrawal of state subsidies to Chinese electric car manufacturers or the guarantee that these do not apply to companies exporting to the EU.

“This is also a way to resolve the situation”, says Valdis Dombrovskis, believing it is “possible” to change Chinese behavior.

The position comes at a time when the EU is carrying out several investigations into alleged illegal Chinese subsidies to companies operating in the community bloc, particularly electric cars, which have already led to several criticisms from Beijing and the threat of a complaint to the WTO.

At issue is the investigation launched last October into Chinese state subsidies to electric car manufacturers that quickly entered the EU market and are sold at a much lower price than those of EU competitors.

Last week, the European Commission threatened to increase tariffs on EU imports of electric vehicles from China from the beginning of July, after provisionally concluding that there were unfair practices by Beijing to benefit Chinese manufacturers.

In a statement released at the time, the community executive indicated that, provisionally, imports of electric vehicles from BYD could be taxed at 17.4%, from Geely at 20% and from SAIC at 38.1%, these being the brands included in the sample investigated, in a decision that will then be communicated on July 4th.

In addition to the three mentioned in the statement, other Chinese electric car manufacturers that cooperated with the investigation but were not included in the sample will be taxed at 21% and those that did not cooperate at 38.1%.

This date of July 4th refers to the conclusion of the investigation, when provisional compensation duties can then be applied through a guarantee decided by the customs of each Member State, which can then become definitive from November 2nd, as community sources told Lusa.

The same sources indicated that they expect the European market to be “competitive enough” so that such tariffs are not passed on to the consumer.

According to the European Commission, Chinese vehicles have an 8% penetration in the community market – which could double to 15% in 2025, if the same rate continues – and cost 20% less than European ones.

In mid-May, the United States announced new tariffs worth 18 billion dollars (16.6 billion euros) on imports of Chinese products, with electric vehicles being the hardest hit, with rates rising by 25% to 100%.

Mundoquatrorodas