Naturally, given the impact such a tariff could have on Europe’s car manufacturing industry, the report quickly made waves across the world’s global media. However, it must be stressed that the article in question, published by the Global Times, merely refers to comments made by ‘Yuyuantantian’, a Chinese social media influencer.
The Global Times writes that the aforementioned social media China influencer has heard from “automotive industry insiders”, who it is said are “internally moving ahead with the procedure to raise the temporary tariff rate on imported cars with large-displacement engines”. Moreover, Yuyuantantian claimed the tariff could be as high as 25%.
The Global Times article also cites comments made by Cui Fan, a professor at the University of International Business and Economics, who said that the tariffs could be introduced within the scope of China’s WTO commitment.
Survey shows dissatisfaction with proposed EU tariffs on Chinese car imports
Meanwhile, another report by the same outlet published this morning revealed concern about the impact of EU tariffs on Chinese vehicles.
It is said that in a survey jointly conducted by the China Chamber of Commerce to the EU (CCCEU) and the China Economic Information Service (CEIS), 82% of the Chinese EV companies surveyed felt that the EU’s anti-subsidy investigation had reduced their confidence in investing in Europe. In addition to this, 73% said the plans had damaged sales in Europe.
Chinese state media claims “boomerang” effect will hit European vehicle manufacturers
As well as publishing numerous articles on the EV tariff topic this week, the Global Times also published an infographic clearly intended to lobby against the imposition of tariffs on Chinese EVs coming into the EU.
On that infographic, it is warned that tariffs will result in a “boomerang” effect that will negatively affect Europe’s automotive industry:
“The intended tariffs will also potentially apply to global brand vehicles manufactured in China, as the tariffs target cars imported from China. A large part of China’s EVs exported to Europe were originally produced in China by European and US car companies before being re-exported to Europe. The EU’s behaviour of following in the US’ footsteps to impose tariffs on Chinese EVs will be a “boomerang” that only harms the EU’s auto industries and its customers,” reads the infographic.
The graphic also boasted that EU car manufacturers’ most efficient factories are in China, and highlighted the words “protectionism doomed to fail”. Moreover, it was claimed that the investigation is based on its subjective judgement of a “threat” rather than a complaint from EU industry players.
“The sampling basis and scope of the investigation are all questionable, and the details of the investigation that have been exposed are also shocking,” the infographic stated.
The view from Europe
Reacting to the news, a spokesperson for Mercedes-Benz told Reuters that the German car giant supports a liberal trade regime based on WTO rules.
“Against the background of globalisation and the economic interdependencies of our time, the motto for securing prosperity and peace is: dialogue and constructive cooperation. We are counting on the efforts of politicians to continue this dialogue,” said the spokesperson.
The same Reuters report added that the European Commission had said yesterday that it was looking into the situation “with a view to discussing if a mutually agreeable solution can be found.”
Would tariffs be effective?
Earlier this month, Trans.INFO reported that German research institute IfW Kiel had recently created simulation calculations regarding the impact that a 20% tariff on Chinese electric cars would have on bilateral trade and production in Europe.
According to the research, the number of imported electric cars from China would fall by 25%, i.e., by around 125,000 vehicles worth almost $4 billion, if the import figures for 2023 are taken as a reference value. However, German car manufacturers that manufacture in China would also be affected.
Furthermore, the authors estimated that sales in the EU internal market would increase by $3.3 billion. However, the prices for electric cars would also rise, as production in the EU is more expensive due to various factors.
Moreover, the American think tank Rhodium Group is also of the opinion that the tariffs at the current level would have little effect. It stated that as Chinese manufacturers are so profitable due to their significant cost advantages, they would continue to export to Europe and make high profits.
Photo: Matti Blume (CC BY-SA or GFDL), via Wikimedia Commons