Next week, the EU Commission is expected to decide on higher tariffs for electric cars from China. The European Union, like the USA, wants to seal off the market against cheap Chinese imports. A trade dispute is looming.
Mercedes boss Ola Källenius is certain: A decision on special tariffs against Chinese electric cars is imminent. The manager said this at an industry meeting in Bochum on Thursday. Whether Volkswagen, BMW or Daimler: The export-oriented German car manufacturers are watching closely to see what exactly the EU Commission will decide on possible tariffs against electric cars from China.
The bone of contention: The EU Commission accuses China of distorting competition by subsidizing domestic electric car manufacturers. The decision on higher tariffs was supposed to be made this week, but was apparently postponed by the EU until next week.
China sees itself as a victim
China’s leadership is once again portraying itself as an innocent victim in this matter, as it has done in other economic conflicts before. In Beijing, the spokesman for the Chinese Ministry of Commerce, He Yadong, went to the microphones and made China’s position on the matter clear: the country feels that it is being treated unfairly by its international trading partners.
“The EU has exaggerated terms such as ‘China’s overcapacity’ or ‘unfair competition’ and has set up trade barriers in a discriminatory manner. The EU Commission has launched investigations into Chinese companies and products, distorted the definition of state aid and violated rules and procedures,” he criticized. “All of this has increased the risk of trade disputes between China and the EU and undermines companies’ trust in cooperation with the European Union.”
The dispute over tariffs on Chinese electric cars is not the first of its kind. There have also been examples of solar energy systems, for example, where Chinese products have pushed European ones out of the market. With low prices that made everyone wonder how they would be possible without state aid from Beijing.
Protection against dumping prices
When it comes to electric cars, the EU Commission could follow the example of the USA. High tariffs on Chinese electric cars have recently come into force there – to protect the domestic industry from possible dumping prices. This has also met with criticism in Beijing. As the spokeswoman for the Foreign Office, Mao Ning, said, trying to turn the tables:
The US has adopted discriminatory practices against Chinese electric cars, which violate World Trade Organization (WTO) rules. They also harm the stability of global supply chains and will ultimately harm the US itself. (…) China will also take resolute measures to protect its own legitimate interests.
What such countermeasures might look like is still unclear. However, German industry and German politicians are likely already concerned about the possible effects.
Good contacts with Orban
At least China’s Ministry of Commerce has recently made diplomatic-sounding statements: after all, Chinese car manufacturers have already set up factories in Europe. This shows the willingness to work together well.
It is questionable whether this desire is selfless. The best example is a factory belonging to the Chinese electric car manufacturer BYD, which was built in Hungary of all places. Viktor Orban, a head of government who is absolutely friendly to China, is in power there.