2024-10-29 22:06:00
In response to Brussels’ decision, the Chinese Chamber of Commerce denounces “politically motivated” European surtaxes.
Brussels raises its tone against Beijing. The European Commission on Tuesday adopted the regulation imposing additional customs duties on electric cars imported from China, accused of creating unfair competition. Despite Germany’s hostility, Brussels has decided to add a surcharge of up to 35% on Chinese-made battery-powered vehicles to the 10% tax already in place, according to the text of the regulation published online. The decision is expected to be published in the EU’s Official Journal on Wednesday and come into force on Thursday.
The declared objective is to re-establish fair conditions of competition with producers accused of benefiting from huge public subsidies. It is about defending the European automotive industry and its approximately 14 million jobs from practices deemed unfair identified during a long Commission investigation.
“Politically motivated decision”
An organization representing Chinese companies in Europe, for its part, condemned the new surcharges and called for an end to the measures it believes “protectionists”. “We deeply regret and are dissatisfied with the politically motivated and inward-looking decision” the EU has taken, the Chinese Chamber of Commerce in the EU (CCCEU) said in a statement on Tuesday.
Beijing had already denounced it “unfair and unreasonable protectionist practices” following the green light given at the beginning of October by EU member states to the surcharges proposed by the Commission. Until the last moment, the European Trade Commissioner, Valdis Dombrovskis, continued the dialogue with the Chinese Minister of Trade, Wang Wentao, to try to find a negotiated solution. In vain. Despite everything, both sides decided to continue the consultations.
At any time, the surcharges could be removed if agreement is reached on other means to offset the damage identified by the European investigation. China threatens to attack European interests. It has already responded by launching anti-dumping investigations against pork, dairy products and wine-based spirits imported from Europe, including Cognac. Enough to make some EU members waver.
Volkswagen crisis
Germany and four other countries (Hungary, Slovakia, Slovenia, Malta) voted against the Commission’s tax plan, but largely failed to muster the majority needed to reject it. The Commission “It must not trigger a trade war”had warned the German Finance Minister, Christian Linder. The country’s automotive flagships, firmly entrenched in the world’s largest market, fear paying the price. The imposition of European customs duties against Chinese electric cars comes at the height of the crisis of the Volkswagen group which involves the cuts of tens of thousands of jobs and the closure of three factories in Germany. The main European manufacturer reported in early October “a bad approach” of the EU. Its compatriot BMW had even talked about it “a fatal signal” for the European automotive industry.
The customs duties, however, received the support of ten member states including France, Italy and Poland. Twelve others abstained, including Spain and Sweden. “The European Union is taking a crucial decision to protect and defend our commercial interests, at a time when our automotive industry needs our support more than ever”welcomed the French Minister of Economy, Antoine Armand.
But even in France the EU’s approach worries business circles. The Cognac Interprofessional Association (BNIC) complained that it was “abandoned” by the authorities, considering that his sector was “sacrificed” in a commercial conflict which however does not concern it. This Sino-European skirmish fits into a broader context of trade tensions between the West, led by Washington, and China, accused of anti-competitive practices in several other sectors such as wind turbines or solar panels. The EU runs the risk of triggering a “commercial conflict”the German automotive lobby (VDA) reacted. The country’s automotive flagships, firmly entrenched in the world’s largest market, fear paying the price.
The European measures, which are intended to be based on facts and respectful of the rules of the World Trade Organization (WTO), differ however from the punitive and more political approach of the Americans. In the United States, President Joe Biden announced on May 14 an increase in customs duties on Chinese electric vehicles to 100%, up from 25% previously. In Europe, the amount of fines will vary between producers depending on the estimated level of subsidies received. In detail, the additional taxes will amount to 7.8% for Tesla cars produced in Shanghai, 17% for BYD, 18.8% for Geely and 35.3% for SAIC, according to a final document sent to member countries on September 27th. Other groups that cooperated with the European investigation will be charged 20.7% additional taxes, compared to 35.3% for those that did not cooperate.
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