EU’s tax increase on Chinese electric vehicles faces opposition from many parties

According to a report on the Russian Satellite News Agency website on July 5, the European Commission decided to impose a temporary anti-subsidy tax on electric vehicles imported from China from July 5. Mao Ning, a spokesman for the Chinese Ministry of Foreign Affairs, emphasized at a press conference on July 5 that China strongly opposes this.

Mao Ning said that China has repeatedly stated its position on the EU’s anti-subsidy investigation on Chinese electric vehicles and strongly opposes this.

Mao Ning said: “We always believe that specific economic and trade issues should be properly resolved through dialogue and consultation. China will also take necessary measures to firmly safeguard its legitimate rights and interests.”

According to a report by Agence France-Presse on July 4, the EU announced on the 4th that it would impose a temporary tariff of up to 38% on electric vehicles imported from China.

A survey launched by the European Commission last year concluded that China’s government subsidies to electric vehicle manufacturers unfairly weakened the competitiveness of European competitors-Brussels hopes to protect companies in the process of the EU’s automotive electrification transformation.

In response to the EU’s imposition of tariffs on the current 10% basis, the EU Chamber of Commerce in China criticized it as “trade protectionism” “driven by political factors” and expressed the hope that the two sides would find a solution through dialogue.

According to the report, European countries have different opinions on this. Germany and its local auto giants with close trade ties with China are worried that if China retaliates against EU exports, it will do more harm than good. Germany’s Volkswagen AG slammed the move as “harmful.” France and Italy have pushed for tariffs on Chinese electric vehicles, but Sweden, like Germany, has reservations, and Hungary is clearly opposed. According to the report, the temporary tariffs will take effect on July 5, and after the 27 EU member states vote, the formal tariffs will take effect in November for a period of 5 years. Among the temporary tariffs decided by the European Commission, BYD will be taxed at 17.4%, Geely at 19.9%, and SAIC at 37.6%. The average tax rate for other Chinese automakers that cooperated with the investigation was 20.8%, while the tax rate for automakers that did not cooperate with the investigation was 37.6%. Valdis Dombrovskis, the European Commissioner for Trade, said Brussels would continue to “engage closely with China to find a solution acceptable to both sides.” According to the report, Chinese electric car manufacturer Weilai said it still hopes to reach a solution with the EU. Another electric car manufacturer, Xiaopeng, said it would find ways to reduce the impact on consumers without changing its international strategy.

EU officials said that if the negotiations reach a solution, they may not need to impose tariffs in the end.

In addition, according to the Russian Satellite News Agency website on July 5, SAIC Group issued a statement on July 5 saying that in order to effectively safeguard its legitimate rights and interests and the interests of global customers, SAIC Group will formally request the European Commission to hold a hearing on China’s temporary anti-subsidy tax measures on electric vehicles and further exercise its right to defense in accordance with the law.

According to the statement, the defense includes: The European Commission’s anti-subsidy investigation involves commercially sensitive information, such as the investigation requires cooperation in providing chemical formulas related to batteries, which exceeds the normal scope of the investigation. The European Commission made mistakes in its determination of subsidies, such as including subsidies for new energy vehicle purchases given to domestic consumers in the calculation of subsidy rates for sales in the European Union. During the investigation, the European Commission ignored some of the information and defense opinions submitted by SAIC, and made adverse presumptions based on the so-called “non-cooperation investigation” in Article 28 of the Basic Anti-Subsidy Regulation, which falsely increased the subsidy rates of multiple projects.

According to a report on the website of the German newspaper Die Welt on July 4, despite a lot of criticism, the European Commission said on July 4 that it would impose additional tariffs of up to 37.6% on Chinese electric vehicles.

German automotive lobbying groups have criticized this. The German Association of the Automotive Industry wrote in a “key points document” that tariffs “are not in the interests of the European Union” and that related measures harm the interests of both European consumers and European companies.

According to the report, under pressure from Germany, EU officials are currently negotiating with China. German Federal Minister of Economics Robert Habeck said Germany is not interested in “tariff competition and the resulting market division.”

“If the European Commission can find another option in negotiations with China, this form of tariffs may be avoided. Politicians think that tariffs are helping us, but the opposite is true,” said Thomas Steger, public relations manager at Volkswagen.

Like Volkswagen, all European automakers are now openly opposed to tariffs. Oliver Zipser, chairman of the BMW Group, criticized that imposing additional import tariffs would lead to a dead end.

The report said that in the automotive industry, competition from China is described as a driving force. “Without competition from China and cheap electric vehicles, Europe’s electric vehicle momentum will not bring the power we need to achieve our climate goals,” said Steger. “The transition is slowing down, and the Chinese are surpassing us technologically.”

In addition, the Russian “Guide” website also reported on July 4 that Vladislav Belov, deputy director of the Institute of Europe of the Russian Academy of Sciences, believes that the negative economic consequences of the EU’s temporary tariffs on Chinese electric vehicles will be borne first by European consumers.

Belov said: “The problem facing Europeans is not that Chinese companies are subsidized, but that they lack effective management. Europeans are also subsidizing their own companies in different ways, but now they can’t make electric cars that sell well in the international market.”