In a significant turn in the field of international trade, the European Union has announced the adoption of additional tariffs that could reach up to 38% on electric vehicles imported from China.
The measure, which is temporary, is intended to curb the expansion of Chinese manufacturers and protect the European automotive industry, which is increasingly concerned about competition from Chinese electric models.
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The EU decision is based on an investigation that indicates that the Chinese government has provided more than 200 billion yuan (approximately 27.5 billion US dollars) in subsidies and tax deductions between 2014 and 2022significantly favoring its electric vehicle manufacturers over their international competitors.
These subsidies have boosted not only the internal growth of Chinese industry but also its exports, which have seen a significant increase in recent years.
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The rise of Chinese electric vehicles is reflected in impressive figures. In December, the 69% of electric vehicles delivered worldwide were sold in Chinaaccording to Rystad Energy.
In addition, exports of these vehicles increased by 70% in 2023, with almost 40% of them destined for the European Unionwhich has become the largest market for Chinese electric vehicles.
Among Chinese manufacturers, BYD stands out as the undisputed leader in the sector.
In 2023, the company reported record profits and expressed its intention to position itself among the top five automotive groups in Europe.
Other major manufacturers such as SAIC, MG Motor and Polestar They have also strengthened their presence in the European market.
The rapid rise in market share of Chinese electric vehicles has raised concerns in the EU. According to the European Automobile Manufacturers Association (ACEA)Chinese-made electric vehicles accounted for almost 22% of the European market in the last year, compared to 3% from three years ago.
The EU argues that Chinese subsidies constitute an “unfair policy” that threatens the competitiveness of European manufacturers.
After nearly nine months of investigation, the EU has decided to impose targeted tariffs on several Chinese companies: BYD will face a tariff of 17.4%, Geely 19.9%, and SAIC 37.6%.
Other manufacturers who collaborated in the investigation will face an average tariff of 20.8%while those who did not cooperate will see a tariff of 37.6%.
Despite this measure, there is still a window for negotiations between EU and Chinawith a final decision on tariffs expected within four months.
Beijing, for its part, has expressed its intention to defend the interests of its companies, even considering taking the case to the World Trade Organization (WTO).
Although specific countermeasures have not yet been announced, China has hinted at possible retaliation that could affect European products such as wines, dairy products, pork and large motor vehicles.
The potential impact of these additional tariffs could be significant. A study by the German Kiel Institute estimates that imports of Chinese electric vehicles could fall by 1.5% 42% as a result of the new tariffs.
Rhodium analyst Gregor Sebastian suggests there will be a “short-term dip” in sales, but in the long term Chinese manufacturers may find ways to adapt and stay competitive.
In conclusion, the imposition of additional tariffs by the EU on Chinese electric vehicles marks a new chapter in the global trade battle. While both sides prepare for possible negotiations and retaliation, the future of the electric vehicle market in Europe and the position of Chinese manufacturers in it remain uncertain.
The adaptability and resilience of the automotive industry will be crucial in the coming months to navigate this complex trading landscape.