European Union (EU) member states are expected to confirm in a vote on Friday the imposition of customs duties on electric cars imported from China, despite hostility from Germans who fear a trade war with Beijing.
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The European Commission plans to add to the 10% tax already in place a surcharge of up to 35% on Chinese-made battery vehicles. These countervailing duties are due to come into force at the end of October.
The objective is to re-establish fair conditions of competition with manufacturers accused of benefiting from massive public subsidies. This involves defending the European automotive industry and its approximately 14 million jobs against practices deemed unfair identified during a long Commission investigation.
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.
Representatives of EU member countries are due to meet in Brussels from 10 a.m. (8 a.m. GMT) and vote late in the morning to confirm the measures announced in June by the Commission.
They are very divided.
Germany fears 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.
Spain’s turnaround
During a visit to China in September, Spanish Prime Minister Pedro Sanchez, initially supportive of tariffs, suddenly called on the European Union to “reconsider” its position.
But the hostile countries, which also include Hungary and Slovakia, will not be able to reach the majority necessary to overturn the Commission’s decision, European diplomats interviewed by AFP estimated Thursday evening.
France, Italy, Poland and the Baltic countries in fact support a firm position.
According to the most likely scenario, the divisions within the 27 will also 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 have a free hand to implement countervailing customs duties which will also apply to 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 removed if such a solution would compensate for the damage identified by the European investigation.
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.
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