Left: BMW Group Chairman Zipse criticized the EU for making wrong decisions. \Xinhua News Agency

According to reports from the Wall Street Journal, BBC and Bloomberg, the European Commission announced on the 12th that it intends to impose temporary anti-subsidy duties on electric vehicles imported from China, and officials, car companies and experts from many European countries have expressed opposition. The Vice President of the Eurasian Center and former Commissioner for Transport of the European Commission, Bourz, warned that this move will backfire on the European automotive industry. Hungarian Minister of National Economy Nagy said that Hungary disagrees with the EU’s imposition of tariffs on Chinese electric vehicles; protectionism is not a solution, what Europe needs is cooperation and free market competition.

On the 12th, German Vice Chancellor and Economy Minister Habeck expressed dissatisfaction with the European Commission’s plan to impose tariffs and called for negotiations with China. He pointed out that tariffs are usually the worst means, “If tariffs are used as a protectionist tool, if we enter a tariff race… then we will throw the baby out with the bath water.” German Minister of Digitalization and Transport Wiesing also criticized the EU’s punitive tariffs for being detrimental to German companies, and stressed: “The way to make cars cheaper should be more competition, open markets and significantly improved production conditions, not through trade wars and market blockades.”

Norwegian Finance Minister Werdum said Norway would not follow the EU in imposing tariffs on Chinese electric vehicles, and the EU’s plan “has nothing to do with this government and is not desirable.” Hungarian Minister of National Economy Nagy said Hungary disagrees with the EU’s imposition of tariffs on Chinese electric vehicles; protectionism is not a solution, what Europe needs is cooperation and free market competition.

German companies criticize tariff increases as undermining free trade

The vice president of the Eurasian Center and former European Commissioner for Transport, Bültz, said that the automobile industries of EU countries and China have been deeply integrated. Many European car companies not only export cars to China, but also set up factories in China and export electric vehicles produced in China to the EU market. The German Association of the Automotive Industry warned that arbitrary tariffs would undermine free trade and provoke a trade war.

Volkswagen Group said that in the long run, tariffs will undermine competition and weaken demand for electric vehicles in Europe, with the negative impact far outweighing any potential benefits to Europe’s, and especially Germany’s, auto industry.

Mercedes-Benz Group Chairman Kang Songlin pointed out that fair and free global trade is very important, and Germany, as an exporting country, does not need rising trade barriers. BMW Group Chairman Zipse bluntly stated that the European Commission’s imposition of tariffs on Chinese electric vehicles is a wrong decision. The Stratis Group also stated that it does not support measures that “promote the fragmentation of world trade.”

EU Commission decision still uncertain

The EU’s imposition of tariffs on Chinese electric vehicles will not only undermine trade rules, but will also sacrifice the interests of EU consumers. A research report recently released by the Kiel Institute for the World Economy in Germany shows that this move will lead to a significant increase in car purchase costs for EU consumers, even if the EU increases production and reduces electric vehicle exports.

According to the BBC, the EU announced on the 12th only the preliminary ruling of the anti-subsidy investigation, and there are still variables before implementation. If the EU and China reach an agreement before July 4, the temporary tariffs will not take effect. Automakers may also ask the EU to conduct a separate review to reduce the tax rate for specific companies.

According to Bloomberg, American electric car giant Tesla has made such a request. Tesla has a factory in Shanghai, where electric cars produced account for about 40% of China’s electric car exports. The BBC also pointed out that the European Commission plans to formally implement the policy of imposing tariffs on Chinese electric cars in November this year, but if 15 countries representing at least 65% of the EU population vote against it, this policy cannot be implemented.

Tax hikes run counter to EU emissions reduction targets

According to Reuters: The European Union has repeatedly called on the world to achieve carbon peak and carbon neutrality as soon as possible, and has formulated a plan to ban the sale of fuel vehicles in 2035. Now the European Commission is wielding the stick of protectionism against Chinese electric vehicles, which runs counter to its emission reduction goals, will also undermine the international community’s cooperation in addressing climate change, and hinder the global green transformation.

The European Audit Team said earlier that the price of electric vehicles in Europe is high and consumers cannot afford it, and the choice of alternative fuels is not mature enough; the EU needs to rethink how to implement the plan to ban the sale of fuel vehicles in 2035, otherwise it may jeopardize the EU’s climate goal of achieving net zero emissions in 2050 in the long run. Reuters pointed out that if the EU wants to realize its plan to replace fuel vehicles with electric vehicles, it cannot do without the high-quality and low-cost Chinese electric vehicles. According to reports, China’s electric vehicle battery production accounts for 76% of the world’s production, while the EU accounts for less than 10%.

Vice President of the Eurasia Center and former Commissioner for Transport of the European Commission, Caroline Bourz, has test-driven an electric car made in China. She said that Chinese electric cars are of high quality, stylish in design, constantly updated in function and attractive in price. “Chinese electric cars remain competitive in the European market because they fully consider the needs of users.” Bourz pointed out that promoting green transformation requires global joint efforts, and countries should enhance mutual trust and promote cooperation instead of expanding confrontation; the EU should deepen cooperation with China in the field of new energy vehicles instead of building more “small courtyards and high walls”.

EU provokes tariff war, German and French companies feel threatened

According to reports from The Wall Street Journal and Reuters: The European Commission plans to impose additional tariffs on Chinese electric vehicles. European business circles are worried that this move will trigger a tariff war and have an impact on the sales of German luxury cars, French brandy and other products.

The Wall Street Journal said that once the EU imposes tariffs on Chinese electric vehicles, China can easily take countermeasures against the more than 300,000 luxury cars imported from the EU each year. The EU Chamber of Commerce in China said last month that China may impose a 25% tariff on imported cars with large engines. If this measure is implemented, Porsche will be the first to bear the brunt. According to reports, Porsche’s revenue comes from the Chinese market, but most of its cars are produced in Europe.

French brandy producers are also worried. The EU is the world’s largest brandy producer, and almost all of the brandy exported to China is produced in France. In January this year, the Trade Remedy Investigation Bureau of the Ministry of Commerce of China issued an announcement, announcing an anti-dumping investigation on relevant brandy products from the EU. Morillon, chairman of the French National Cognac Industry Association, said on the 12th that he had noticed the EU’s decision to impose tariffs on Chinese electric vehicles, “We are deeply concerned about the final results of China’s anti-dumping investigation on EU brandy.”

A spokesperson for French aircraft manufacturer Airbus said that the European Union’s imposition of tariffs on Chinese electric vehicles following the United States has exacerbated global trade tensions and tested the adaptability of multinational companies such as Airbus. “Our customers are spread all over the world, and trade tariffs have increased the complexity and cost of our supply chain, our own business and customer relationships.”

Many parties oppose EU tax increase

European officials

German Vice Chancellor and Economy Minister Habeck: “It would be really bad if tariffs were used as a protectionist tool, if we entered into a tariff race. That would be throwing the baby out with the bathwater.”

Norwegian Finance Minister Werdum: “Imposing tariffs on Chinese electric vehicles is neither relevant nor desirable for this government.”

Hungarian Minister of National Economy Nagy: “Protectionism is not the solution. Instead, we need cooperation and free market competition.”

European car companies

German Automobile Industry Association: “Imposing tariffs will undermine free trade and provoke a trade war.”

Volkswagen: “Tariffs will undermine competition and weaken demand for electric vehicles in Europe in the long term.”

Mercedes-Benz: “Fair and free global trade is very important. It promotes innovation and growth. As an exporting country, we do not need rising trade barriers.”

BMW: “Imposing tariffs will hinder the development of European car companies and will also harm Europe’s own interests.”

expert

“Imposing tariffs on electric vehicles imported from China will further reduce external investment in Europe, hinder the innovation and development of the European automobile and transportation industries, and will not be conducive to Europe’s green transformation,” said Burtz, vice chairman of the Eurasian Center.