Chinese car manufacturers receive so much state aid that it creates unfair competition for European companies. That is why the EU Commission will impose tariffs on Chinese electric cars worth several billion euros. This is reported by the Financial Times.
The EU Commission will inform car manufacturers on Wednesday that it will temporarily impose additional tariffs of up to 25 percent on imported Chinese electric cars. This will apply from next month, the Financial Times reports.
The car-producing countries France and Spain are among the advocates of the additional tariffs. According to the newspaper, it is expected to bring in more than two billion euros annually. This corresponds to around 15 billion. DKK. The money will be included in the EU budget every year. This will be felt because sales of Chinese electric cars are growing in Europe.
China is already the EU's largest trading partner. The populous country exported electric cars worth 10 billion. euros to the EU in 2023. This is a doubling of China's market share in the European market. China now accounts for eight percent of electric car sales in Europe, according to the independent institute Rhodium Group.
Tariff war may be on the way
China has warned that it will retaliate. At the same time, according to the Financial Times, Beijing is trying to persuade a majority of EU countries to oppose the new tariffs. They will be on top of the EU's existing tariffs of ten percent.
Beijing already has a tariff of 15 percent on European electric cars. This could mean that the EU and China are on the verge of entering a tariff war that will make cars more expensive for consumers. Germany, Sweden and Hungary have previously announced that they do not approve the measure for fear of Chinese retaliation.
EU officials tell the Financial Times that Berlin has put pressure on Ursula von der Leyen, who is seeking another term as Commission President, to drop an investigation into Chinese state aid.
The German Chancellor, Olaf Scholz, has warned, according to the newspaper, that "isolation and illegal tariff barriers... ultimately just make everything more expensive and everyone poorer".
Wants to avoid a "solar cell situation"
However, Ursula von der Leyen has stated that the EU's trade deficit with China is completely unreasonably high. In January, she stated that the EU's trade deficit with China is approaching 400 billion euros. That is why the EU Commission has started looking into unfair state aid.
This has been done, among other things, with reference to the fact that Chinese companies have effectively wiped out the solar cell industry in Europe.
Leading Vice-President of the EU Commission, Margrethe Vestager, was unusually direct in her criticism of China in this regard when she spoke at the American University of Princeton in April:
- We saw the script for how China came to dominate the market for solar panels. First, they attracted foreign investment. Often with demands for joint ventures.
- Then China acquired the technology. They gave massive state aid to their own manufacturers. And they closed much of the Chinese market to foreign companies, said Vestager.
/ritzau/
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