The European Union (EU) makes unreasonable demands on Chinese car manufacturers, China's Ministry of Commerce argues. European authorities would also unreasonably request information as part of the state aid investigation of Chinese carmakers. The Chinese authorities want to discuss the situation with the EU, but in order to do so they demand that the announced import duties be taken off the table.
The European Commission recently announced import duties on electric vehicles produced in China. This concerns not only Chinese EV manufacturers, but also, for example, Western manufacturers producing vehicles in China and exporting them to the EU.
Unfair competition
The European Commission concludes, based on investigations, that Chinese EV manufacturers receive state aid in many cases. This creates unfair competition, according to the commission. It argues that this makes Chinese EVs on average 20 per cent cheaper than European counterparts.
Import tariffs introduced by the EU vary by brand. Chinese brands that cooperated with the investigation and are not granted a loose import tariff will face an average import duty of 21 per cent. Brands that refused to cooperate or failed to cooperate sufficiently will be imposed an import duty of 38.1 per cent.
The three biggest Chinese brands - BYD, Geely (Volvo, Polestar & Lynck & Co.) and SAIC (MG) - will be subject to the following tariffs:
- BYD- 17.4 per cent
- Geely - 20 per cent
- SAIC - 38.1 per cent
Chinese government is critical
The Chinese government is critical of the European Commission's decision. Among other things, it argues that the European Commission is unreasonably requesting information from Chinese EV manufacturers, more than would be necessary. Among other things, the European Commission would request an "unprecedented amount of information on the supply chain of Chinese EV makers, a spokesman for China's Ministry of Commerce told Reuters.
The Chinese government wants to sit down with European authorities and talk about resolving the conflict. In doing so, it is demanding that the announced import tariffs coming into force on 4 July be dropped by this date. Chinese Trade Minister Wang Wentao and European Trade Commissioner Valdis Dombrovskis have already agreed to engage in further talks, according to China's state-run newspaper Global Times.
Countermeasures
China is also threatening countermeasures. For instance, shortly after the announcement of the import duties, an investigation into the alleged dumping of European pork on the Chinese market was already announced. A similar investigation into European dairy products is also said to be imminent. Global Times now also reports that Chinese authorities are considering import duties on European petrol-engined cars.
Author: Wouter Hoeffnagel
Photo: Goran Horvat via Pixabay
