New Macron-led EU trade slap on China sparks fury in Berlin and Prague
Brussels' plans to slap hefty tariffs on Chinese cars has sparked fury both in Beijing and in some EU capitals.
The European Union, led by French President Emmanuel Macron, announced on Wednesday plans to hike tariffs on electric vehicles (EVs) made in China, sparking outrage in Berlin and Prague. The decision is part of a broader trade dispute over Chinese government subsidies and the rising exports of green technology from China to the 27-nation bloc.
The EU Commission stated that preliminary results of their investigation into Chinese EV subsidies indicate that China’s battery electric vehicle "value chain" benefits from "unfair subsidisation" harming EU competitors.
To counter this, the EU plans to impose provisional tariffs of up to 38.1 percent on EVs imported from China, adding to the existing 10 percent duties on all imported EVs.
Three major Chinese EV players in Europe are directly targeted: BYD will face a 17.4 percent duty, Geely 20 percent, and state-owned SAIC 38.1 percent. Other Chinese EV manufacturers will be subject to tariffs of at least 21 percent. If discussions with Chinese authorities do not yield a resolution, these duties will take effect on July 4.
The German car industry and senior government ministers have criticised these tariffs. Hildegard Müller, president of the German car industry association VDA, warned: “This measure further increases the risk of a global trade conflict.” German Transport Minister Volker Wissing echoed this sentiment, adding: “The EU Commission’s punitive tariffs affect German companies and their top products.”
Czech carmakers share similar concerns. Zdeněk Petzl, executive director of the Czech Automotive Industry Association, pointed out that removing trade barriers had historically led to prosperity, particularly in the automotive sector. He warned of potential retaliation from China, which could disrupt the import of key materials for EVs and batteries, jeopardising the EU’s carbon reduction goals.
However, Czech Transport Minister Martin Kupka supported the need for the EU to defend itself against unfair competition, highlighting the significant subsidies Beijing provides to its carmakers, putting European manufacturers at a disadvantage.
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He stressed the importance of setting customs duties and competitive conditions that do not artificially inflate the price of electric cars for consumers.
The value of battery-powered cars imported to Europe soared from $1.6billion in 2020 to $11.5billion last year, with most imports coming from Western automakers with factories in China.
EU officials are concerned that unfairly subsidised Chinese imports could undermine Europe’s manufacturers and green tech industries, prompting the planned tariffs to level the playing field.
