Background to the vote by the EU states on the introduction of countervailing duties for Electric cars out of China is that, from Brussels’ perspective, Beijing supports cars manufactured in the People’s Republic with high subsidies that distort competition. The concern: European manufacturers and suppliers could fall under the wheels, but German car manufacturers and suppliers in particular view the project critically. Read the most important questions and answers about this conflict:
What was voted on?
The key question is: Will manufacturers who produce in China and export from there to the EU be punished with additional tariffs from the beginning of November? Specifically, it is about tariffs of 7.8 percent for Tesla and 35.3 percent for companies that did not cooperate with the EU Commission in the investigation. The amount depends, among other things, on how many subsidies a manufacturer receives. They would be added to an already existing tariff of 10 percent. It is still unclear whether or to what extent the tariffs would be passed on to customers.
Which manufacturers are affected?
In addition to Chinese manufacturers such as BYD and Geely, German manufacturers would also be hit. The German top dogs VW, Mercedes and BMW also produce in China for export and would have to pay a corresponding surcharge. Inquiries as to what extent Renault out of France or Fiat Italy The two major European manufacturers left unanswered whether they would be affected by the tariffs. “German and European manufacturers who export from China to the EU are burdened with higher tariffs than individual competitors from China and the EU USA. “That is simply incomprehensible and not very effective,” criticizes the President of the Association of the Automotive Industry (VDA), Hildegard Müller.
Which arguments speak for and which against tariffs?
The EU Commission is pushing for the tariffs because it sees China’s behavior as a threat to European companies. The basic idea is to put it simply: Every euro that an electric car from China becomes cheaper due to subsidies should be offset by tariffs so that these vehicles do not have an unfair competitive advantage.
According to industry figures, Chinese manufacturers currently have a market share of around one percent Germany. However, thanks to a lead in electromobility, companies from the Far East are gaining ground and can impress with affordable electric cars that German brands simply do not have on offer.
The German automotive industry, however, says that the tariffs do not eliminate any structural disadvantages that exist in the EU. For example, high electricity prices and bureaucracy caused by legal requirements are a thorn in the side of the auto industry. There are also fears of countermeasures, and here German manufacturers are more at risk compared to other European companies. While other European manufacturers have no relevant market share in China, German manufacturers have around 20 percent, according to the VDA. “Every car sold in China helps finance the transition to climate-friendly mobility,” says association president Müller.
What are the next steps after the vote?
Even if there is a sufficient majority in favor of the tariffs, they will not automatically be imposed from the beginning of November. If Brussels reaches a solution with China at the negotiating table, the tariffs can be stopped again by the EU Commission, even if a majority of EU states have previously voted in favor of the project.
If a majority speaks out against the tariffs or there is no majority in favor of the tariffs, that does not automatically mean that the EU Commission will drop the tariffs. You can then convene an appeals committee to discuss the matter a second time. Only if there is a sufficient majority in this committee against the tariffs will the Commission not be allowed to introduce the taxes.
How does the federal government view the tariffs?
The parties in the traffic light coalition did not agree before the vote. This is what the Chancellor should do now Olaf Scholz (66) have the last word in the debate. Government circles said Scholz would vote against the tariffs. Federal Economics Minister Robert Habeck (55; Greens) accepted this.
How does Beijing view the tariffs?
With regard to the additional EU tariffs, Beijing speaks of protectionism. Brussels is ignoring facts, ignoring World Trade Organization rules and will only harm itself and others, according to the Chinese Foreign Ministry. Negotiations to resolve the differences were supported by Beijing. In September, Chinese Trade Minister Wang Wentao (60) traveled to Brussels for talks. But Beijing is also threatening countermeasures.
For example, anti-subsidy investigations were carried out against imported dairy products and brandy from the EU. According to the Chinese statement, the brandy investigation found dumping prices, but no measures would be taken for the time being.
What are other countries doing?
In the spring, US President Biden announced that he would impose special tariffs of 100 percent on electric cars from China – effectively removing them from the US market because this would make the final price too high for the vast majority of car buyers. The US government accuses China of flooding global markets with artificially discounted exports. “This is not a competition, this is cheating,” Biden said at the time. This has further intensified the trade conflict between the USA and China.
More on the topic
The Türkiye recently imposed a tax on cars from China of 40 percent, but at least $7,000 per vehicle. In addition, according to the broadcaster TRT, there is a sales tax of 10 percent. Investors are exempt from this rule. Motor vehicles are subject to a high special tax in Turkey. This applies to domestically manufactured and imported vehicles. The tax rate depends on the engine displacement and is currently between 45 and 220 percent.