(Finance) – “We have reached a fundamental step in our investigation into Chinese battery electric vehicles, making public the provisional duties we intend to apply. Our goal is not to close the European market to Chinese electric vehicles, but to ensure that competition is fair “. This is what he stated on the Vice President of the European Commission Valdis Dombrovskis commenting the imposition of countervailing duties on imports of electric cars from China announced by the EU Commission starting from 4 July 2024. The duties are provisional in nature and would be levied in the form of a guarantee by member states on imports of electric vehicles from China. If discussions with the Chinese authorities do not lead to an effective solution, these provisional countervailing duties would become permanent and would actually be levied on cars imported from China.
The individual duties that the Commission would apply to three Chinese producers included in the sample they would be equal to: 17.4% for the BYD brand, 20% for Geely and 38.1% for SAIC. Other Chinese producers that cooperated in the investigation but were not included in the sample would be subject to the weighted average duty of 21%, while those that did not cooperate in the investigation would be subject to the 38.1% duty.
The EU investigation into Chinese electric vehicles “is anchored in facts and evidence. Its sole purpose is to address the distorting effect of unfair subsidies on our industry,” he stressed. Dombrovskis. The hypothesis of additional duties of up to 37.1% above the 10% already applied now “is a measured response to restore the level playing field. It strictly reflects the countervailing subsidies we found during our in-depth investigation. We want avoid escalating trade tensions with China, which are in no one’s interest. We have contacted China to discuss the findings and the way forward. Both the EU and China risk losing any unjustified action or response is not anchored to the World Trade Organization regulation. We remain open to communication channels and are ready to engage with China at all levels, including to corroborate our reasoning and intentions.”
In the absence of action on Chinese subsidies for imports of Chinese electric vehicles, the European Commission’s investigation has highlighted a risk for 2.5 million direct and 10.3 million indirect jobs, as a consequence of the competition with domestic producers of the supply which is believed to be subsidized by China. From what emerged between 2020 and 2023, the market share of the EU industry continuously decreased, going from 68.9% to 59.9%. Meanwhile, the market share of Chinese imports rose from 3.9% to 25%.
THE tariffs proposed by the EU for imports of Chinese electric vehicles – according to what emerges from the information provided by the Commission – would be added to the current 10% duties already applied to the import of battery electric vehicles. With the ranges indicated by the community executive for the various producers, this means that the duties could reach up to 48.1%. Following prior notification to the Chinese government and affected companies, sampled companies now have the opportunity to provide comments on the accuracy of their individual tariff calculations. By 4 July 2024, the Commission will publish a regulation in the Official Journal explaining in detail what was assessed to decide the level of duties. The duties would go into effect the day after publication.
Beijing’s reaction was not long in coming. There Chinese Chamber of Commerce at the EU he expressed “shock, serious disappointment and profound dissatisfaction” at the provisional countervailing duties announced by the Commission on electric vehicles made in China. The fears, we read in a note, are linked to the fact that the move could “intensify commercial frictions between Beijing and Brussels, negatively impacting economic and commercial relations” between the two parties. “The EU has ignored the facts and rules of the WTO, the repeated strong Chinese objections, the appeals and dissuasion of governments and industries of several European states” said the Beijing Ministry of Commerce, commenting on the duties on electric cars decided by Brussels. For the ministry, the EU conclusions are “without factual and legal basis” and ignore “the objective fact that China’s advantages in electric vehicles derive from open competition”. China urges the EU “to immediately correct its wrong practices”, reserving the right to “resolutely adopt all necessary measures” to protect Chinese companies.
“I welcome with satisfaction the announcement that the EU Commission made today of duties on the entry of Chinese electric cars into Europe to protect European production in the full awareness that we also have: the possibility of reaffirming the Italian automotive industry in Italy, one of the driving sectors of our country’s industrial development that they absolutely do not want to give up” said the Minister of Business and Made in Italy, Adolfo Urso.
Germany’s position is different. “It is good that the Commission now offers talks to China – said the Scholz spokesperson, Steffen Hebestreit, at a press conference in Berlin, commenting on the announcement of European duties on Chinese electric cars –. We don’t need more barriers to trade,” she added, stressing however that there must be “conditions of fair competition” in the market.
Hungary also sides with Berlin on the issue of tariffs on China. The Minister of Economy Márton Nagy he said he was against the punitive tariffs on Chinese electric car manufacturers proposed by the European Commission, criticizing the “excessive protectionism of the plan”. He writes it spokesperson of the Hungarian government, Zoltan Kovacs, on and strengthening competition which will be presented at the Competitiveness Council on 8-9 July, underlining the Government’s commitment to promoting a competitive European electric vehicle industry.” From July 1st, Hungary will take over from Belgium as the rotating presidency of the EU Council, a role it will hold until December 31, 2024.
“As a global company, Stellantis believes in free and fair competition in a global trading environment and does not support measures that contribute to the fragmentation of the world – comments the company -. Stellantis is agile in adapting to and taking advantage of any scenario and today’s announcement of tariffs will not deter our overall strategy towards Leapmotor in Europe, as we have taken this potential development into account.” Stellantis will study the announcement ” which will materialize at the latest on 4 July 2024, when the Commission will publish in the Official Journal a regulation that will explain in detail the provisional conclusions that led to the level of duties. In this context, Stellantis will leverage its unique competitive advantages. First, its 51/49 joint venture with Leapmotor, which holds the manufacturing rights to Leapmotor outside of China and which could benefit from Stellantis’ diversified footprint in Europe. Secondly, the Citroën ë-C3 produced in Europe, the price of which starts from 20 thousand euros for a pure electric vehicle, capable of competing with Chinese products.”