Photo taken on January 10, 2024 of Chinese electric cars intended for export at the port of Yantai, in Shandong province (northeast China) (AFP/-, -)
The European Union is preparing to tax imports of Chinese electric cars, but less heavily than the United States, in a perilous balancing act between defending its economic interests and refusing a trade war with Beijing.
From Mercedes to Ferrari, Europe is the cradle of prestigious automobile brands. Champion of gasoline and diesel engines, it nevertheless fears becoming an industrial museum if it fails to stem the announced surge of Chinese models which have a head start in electric vehicles.
Accusing Beijing of illegally boosting its manufacturers in this market of the future, the President of the European Commission Ursula von der Leyen sounded the mobilization in September, by opening an anti-subsidy investigation.
This should result in June, and at the latest on July 4, in the increase in EU customs duties on imports of Chinese electric cars, currently at 10%.
These vehicles “are flooding global markets thanks to prices kept artificially low by massive public subsidies,” said Ms. von der Leyen.
China denounces a “protectionist” approach.
This exchange of arms is part of a broader context of commercial tensions between the West, with Washington in the lead, and the Asian giant, which is accused of destroying competition in several other sectors such as wind turbines, solar panels and even batteries.
In the United States, President Joe Biden announced on May 14 an increase in customs duties on Chinese electric vehicles to 100%, compared to 25% previously, transforming the American market into a fortress where the national champion Tesla reigns supreme.
A week later, Ursula von der Leyen declared that the European response would be “more targeted” with a tax corresponding “to the level of the damage” suffered.
EU customs duties could reach 20% to 30%, experts say. Enough to slow down imports of Chinese electric vehicles without completely blocking them.
The Twenty-Seven thus hope to protect the billions of euros of investments made by the sector in the electricity transition while avoiding a deadly conflict with their second economic partner behind the United States.
– European industry divided –
The President of the European Commission Ursula von der Leyen in Brussels, February 1, 2024 (AFP/Archives/JOHN THYS)
China “has prepared many countermeasures”, however, warned the Chinese Chamber of Commerce to the EU (CCCEU).
Beijing already responded in January with an investigation targeting all wine spirits imported from the European Union, including cognac.
Wine, dairy products, pork and large-engine cars are also in the sights, according to the Chinese state press.
Washington is ready to bear the cost of conflict. The American measures “are based on a political priority which is to isolate China and slow down its technological development”, estimates Elvire Fabry of the Jacques Delors Institute.
“The European approach focuses on the economic field. It is based on facts established by an investigation” and aims to re-establish fair conditions of competition, explains this expert in trade geopolitics.
The investigation also comes under pressure from Washington which is seeking a common front against Beijing.
Rarely, this is an initiative from Brussels which has not received any complaints from the industry. This is also divided.
Germany has “weighed to minimize customs duties because its manufacturers are very committed to China”, notes Elvire Fabry. Audi, BMW, Mercedes and Volkswagen generate nearly 40% of their sales there.
“The risks of a major trade conflict are obvious and its consequences must be taken into account,” worries a spokesperson for the German automobile industry federation VDA, calling for “a policy that renounces tax increases “.
On the French side, Renault, Peugeot and Citroën are absent from the world’s largest market and Paris has pushed to protect the European sector which employs 14.6 million workers.
China, which overtook Japan last year as the world’s leading automobile exporter, invested very early in batteries, the technological heart of electric vehicles which it has made its specialty.
In Europe, Chinese brands are growing quickly thanks to competitive prices.
They went from less than 2% of the electric car market at the end of 2021 to almost 8% at the end of 2023, according to the Jato institute, taking advantage of the ban on sales of gasoline and diesel engines decided by the EU. horizon 2035 to fight against global warming.
© 2024 AFP
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