EU Trade Spat Over Chinese EVs Escalate as Provisional Tariffs Kick In
The European Union is set to confirm their provisional tariffs to prevent waves of subsidized China-built electric vehicles from entering the European market, despite efforts to strike a deal.
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00:00protecting automakers in Europe in the form of additional tariffs on Chinese-built electric vehicles.
00:06It comes despite efforts from both the European Commission and Beijing to strike a deal.
00:11Provisional duties of up to 37.6 percent, on top of its standard 10 percent car tariff,
00:18will add billions of dollars in new costs for Chinese brands like BYD, Geely and SAIC.
00:25It's the result of the bloc's largest trade case against China, launched last year by Commission
00:31head Ursula von der Leyen, which concluded Chinese EV makers weren't playing by global
00:36trade rules and were benefiting from unfair subsidization.
00:41As we've seen for the past years, China has failed to address those grievances that the EU has
00:47raised, in particular in market access and excessive subsidies. So this is what led to
00:52the Commission to really step up its game to protect European interests and European competitiveness.
00:59But not all member states are on the same page. France is among one of the strongest backers,
01:05while Germany wants Brussels to drop the tariffs, as German carmakers fear retaliation from Beijing.
01:12A third of their sales last year were in the Chinese market. German economy minister Robert
01:18Habeck recently went to Shanghai to maintain good relations with his Chinese counterparts.
01:24What I suggested to my Chinese partners today, that the doors are open for discussions. And I
01:31hope that this message was heard. Tariffs are only the ultimatum. I don't want them and I hope nobody
01:38in Europe wants the tariffs. While EU members will still have the chance to voice concerns
01:44about the future of these tariffs in the coming weeks, they're not the only ones worried by
01:49Beijing's cheap EVs. Turkey and Brazil are also going ahead with their own tariff plans
01:55on Chinese EV imports, while Indonesia is set to impose up to 200% tariffs on Chinese goods
02:02to counter dumping. The Southeast Asian nation has just launched its first EV battery plant,
02:09aiming to leverage its large reserves of materials like nickel to claim its own stake
02:14in the emerging industry.
02:34Notably, US President Joe Biden has slapped on a 100% tariff, effectively making it unprofitable
02:41for Chinese EV makers to sell to the United States. Trade analysts say Washington has learned
02:47its lesson, having previously waited until domestic industry was damaged by surges in
02:52Chinese imports, but that their hardline approach this time could impact trade relations with other
02:58countries. This is going to make the trade landscape even more uncertain because if the
03:06United States, for example, does not allow into our country, let's just say Chinese vehicles
03:14that are being made in Thailand, we may find ourselves having some trade friction with
03:21Thai authorities. With potential to redraw global trade maps, economists are watching for Beijing's
03:27reaction. In the EU's case, China could up tariffs on European pork, cognac or luxury cars.
03:35But with negotiations still on the table, all will depend on how much Beijing is willing to
03:40compromise and how far the Commission is willing to go to protect European interests.