The harsh customs duties imposed by the EU on Chinese cars will come into effect next week, if a last-minute agreement is not reached.
BEIJING China says it is seriously trying to avoid a trade war with the EU.
According to the country’s state media, China is seeking a compromise solution for the export of its electric cars in the extra negotiations taking place in Brussels this week. The negotiations are conducted under the leadership of the EU Commission.
If no agreement is reached, the additional customs duties already decided by the EU Commission for Chinese cars will come into effect on July 4. The EU justifies the tariffs by saying that China’s subsidies to its own car industry distort competition in Europe.
Tariffs of as much as 38.1 percent would affect the sales of Chinese cars in Europe obviously quickly. The Chinese have warned of serious countermeasures if the tariffs are not completely canceled or at least significantly reduced.
China has already launched an investigation into gas cars, pork and dairy products imported by Europeans into China. According to experts, potential punitive tariffs in China could mean, for example, 25 percent tariffs on European cars with 2.5-liter or larger engines.
European car manufacturers have mixed reactions to the dispute. On the one hand, they complain about cheap Chinese electric cars flowing into Europe, but at the same time they fear possible retaliation in the important Chinese market. China is an important export country for German and French cars.
French elections on the way
China has stated its willingness to negotiate several times in recent weeks. It has been in a trade war with the United States for more than six years, and it does not want to experience the same with the EU.
However, for the same reason, China has said that it holds the EU responsible for the current stalemate, which could lead to a trade war.
Chancellor of Germany Olaf Scholz has forced China to show in practice that it is ready for compromises.
Representatives of the European automotive industry and industry experts estimate that this compromise requires China to make considerable concessions in the negotiations.
Removing the tariffs before the already agreed deadline of July 4th is made more difficult by, among other things, the French elections, the second round of which will be held three days later. According to experts, finding a political agreement at election time can be difficult.
Source: Reuters