Anti-dumping investigations
For its part, China denounces a “protectionist” approach. It has already responded by launching anti-dumping investigations targeting pork, dairy products and wine-based spirits imported from Europe, including cognac. The representatives of the member countries of the European Union, meeting in Brussels, voted at the end of the morning. They were, as expected, very divided. Germany, with four other countries (Hungary, Slovakia, Slovenia, Malta) spoke out against, but largely failed to gather the majority necessary to overturn the Commission’s decision, according to results sent to AFP by European diplomats.
Berlin fears that the dispute could turn into a trade war with the Asian giant. Its flagships BMW, Mercedes and Volkswagen, strongly established in the world’s largest automobile market, fear paying the price. The tax project received the support of ten member states including France, Italy and Poland. Twelve others abstained, including Spain and Sweden, which had nevertheless expressed their hostility.
Continuing dialogue with Beijing
During a visit to China in September, Spanish Prime Minister Pedro Sanchez, initially in favor of customs duties, called on the European Union to “review” its position. The divisions within the 27 did not make it possible to bring together the necessary qualified majority (at least 15 member states representing 65% of the EU population) to formally approve the surcharges. But, in the absence of a clear vote in one direction or the other, the European executive will be able, as it intends, to implement these countervailing customs duties which will also apply to the models of non-Chinese groups assembled in China. Their amount varies according to the manufacturer depending on the estimated level of subsidies received. In detail, additional taxes will amount to 7.8% for Tesla, 17% for BYD, 18.8% for Geely and 35.3% for SAIC, according to a final document sent to member countries on September 27.
Other groups that cooperated in the European investigation will be charged 20.7% additional taxes, compared to 35.3% for those that did not cooperate. However, a dialogue continues between European Commissioner Valdis Dombrovskis and Chinese Commerce Minister Wang Wentao to try to find a negotiated solution to the conflict. At any time, the surcharges could be eliminated if such a solution made it possible to compensate for the damage identified by the European investigation.
Trade tensions
This skirmish is part of a broader context of commercial tensions between the West, led by Washington, and China, accused of destroying competition in several other sectors such as wind turbines, solar panels and even batteries. The European measures, which are intended to be based on facts and respectful of the rules of the World Trade Organization (WTO), however differ from the punitive and more political approach of the Americans.
In the United States, President Joe Biden announced on May 14 an increase in customs duties on Chinese electric vehicles to 100%, compared to 25% previously. “There is no chance that the EU and the United States will achieve their climate goals within the deadlines they initially set without the help of Chinese electric vehicles,” said Tu Le, general manager of Sino Auto Insights. “They will either have to adapt their objectives or allow the entry, at least partial, of Chinese electric vehicles.”
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