THE’European Union confirmed the introduction of countervailing duties of up to 35.3% in the import sector vehicles electricalduties which will remain in force for a period of five years. This intervention aims to counterbalance what is considered an unfair advantage of Chinese companies, resulting from substantial state subsidies, which has sparked a heated debate among European operators in the sector.
There European Commission explained that these measures are intended to nullify the effects of subsidies enjoyed by the Chinese automotive industry, particularly in the electric battery segment. According to European authorities, such state aid could cause economic damage to European economic actors by hindering fair competition. Valdis DombrovskisEU trade commissioner, underlined the Union’s commitment to open and fair trade practices, highlighting the willingness to explore solutions that respect the rules of the World Trade Organization (WTO).
In the EU’s mind, the tariff move represents an attempt to defend and stimulate the automotive industry of the Old Continent, while addressing challenges related to innovation and alleged goals climate. Small note: it was the EU itself that created “the problem”, which has self-imposed to produce only electric cars by 2035, sending the internal combustion engine to waste despite knowing that the China it had a competitive advantage in terms of technology and raw materials. In short: the EU created the problem (handing it over to the only ones who know how to produce low-cost electric cars) and then tries to resolve it with duties, which will certainly produce a Chinese reaction (already promised) with a relative loss of exports in other sectors. Beijing has already responded in recent weeks with retaliation on European brandy, pork and dairy products.
Not to mention that large Chinese manufacturers, such as BYDhave already started building factories in Europe (in Hungary) or Turkey, which will allow them to produce the vehicles directly on EU soil with their technologies and raw materials, thus bypassing duties.
In fact, the Germans are not there. The reaction of the German automotive industry, through the words of Hildegard Müller of the VDA, highlights concerns about the impact of tariffs on global trade and the risk of provoking large-scale trade conflicts: “This is a setback for global free trade – he said – and therefore for prosperity, the conservation of jobs work and the growth of Europe”. Let us remember that only 10 governments voted in favor of the duties (including Italy) while 5 voted against (Berlin is among them) and 12 abstained.