With the latest developments in the ongoing trade war between the EU and China, tensions are escalating as tariffs of up to 45 per cent on Chinese electric vehicles come into play. Here’s a breakdown of the key points surrounding this issue:
- The EU is imposing tariffs on Chinese electric vehicles due to allegations of unfair industrial subsidies.
- The tariffs, effective for five years starting Wednesday, are in response to China’s alleged protectionist measures.
- Talks between the two sides are ongoing, including discussions on implementing “minimum prices” for Chinese-made vehicles sold in Europe.
- The EU decision follows a thorough investigation into China’s support for its EV industry, spearheaded by commission president Ursula von der Leyen.
- China has criticized the EU’s actions as a violation of international trade rules, with concerns about the impact on global efforts to combat climate change.
Despite the EU’s move to level the playing field in Europe, there are concerns about potential retaliation from Beijing, especially for EU countries that export to China. The European car industry, already facing challenges with the influx of low-priced Chinese EVs, is bracing for further impact with the implementation of these tariffs.
- Majority of the major European car manufacturers have issued profit warnings this year, highlighting the struggles faced by the industry.
- Volkswagen, Europe’s largest car manufacturer, is planning significant cost-cutting measures, including plant closures and job cuts.
- The tariffs, announced in June, are tailored to individual companies based on the level of subsidies they received, with varying percentages ranging from 7.8% to 35.3%. Those that cooperate will face a 20.7% tariff, while non-cooperative companies will be hit with a 35.3% levy.
The situation remains contentious, with both sides standing firm in their positions. While the implementation of these tariffs may signal a rocky road ahead for EU-China trade relations, the ultimate impact on consumers in terms of pricing remains uncertain. Stay tuned as this trade dispute continues to unfold.
