A little over a week after Europe’s decision to increase its customs duties on Chinese electric cars, nothing seems to have been finalized yet.. Indeed, while waiting for the initial “anti-subsidy” investigation to be completed and the final amounts of the additional taxes that will be applied to be finalized on November 2, 2024, the European Commission had decided not to waste any more time. And had set a deadline of July 4 to start taxing the production of MG, Tesla (Model 3), BYD and other manufacturers from the Middle Kingdom.
Except that obviously, China is not happy with this decision and the customs duties which can rise up to 38.1%, in addition to the 10% already existing. And neither do German manufacturers since they would be the first to suffer from reprisals from China. Then negotiations began between the two camps.
Read also. Customs duties on Chinese cars: China plans to file a complaint against Europe
Withdrawal of customs duties
It is indeed At the instigation of the German Minister of the Economy, Robert Habeck, traveling to China in recent days, Europe and China have undertaken to talk to each other and renegotiate the recently announced sanctions. Especially since China, in retaliation for additional taxes on its electric vehicles exported to Europe, had mentioned also taxing thermal vehicles from the Old Continent more.
It is exactly to avoid as much as possible this escalation of sanctions, and a possible trade war, that the European Commissioner Valdis Dombroskis and the Chinese Minister of Commerce Wang Wentao, have undertaken tariff talks. And China to request the withdrawal of preliminary customs duties by July 4, 2024.
Retaliation on the automobile (and more if affinities)
In any case, this is what the Chinese media Global Times, controlled by the Chinese state, said this Sunday, June 23. If for the moment nothing has been decided yet, the discussion was described as “open and constructive” by a spokesperson for the European Commission. Furthermore, the president of the Automobile Industry Federation (VDA), Hildegard Müller, explained that these bilateral negotiations represent “an important first step towards an agreement”.
It must be said that both parties, Europe and China, would undoubtedly lose by not reaching an agreement. Because if for Europe, this protectionism makes it possible to avoid unfair competition, it could also be the start of an escalation. And what the EU would gain on the one hand, it would also undoubtedly lose another, while sanctions against electric cars could lead to much broader reprisals : “large” thermal engines with a displacement greater than 2.5 liters, but also European imports of pork or dairy products.
Especially since China has found a solution to continue to distribute its cars in Europe, by opening factories on the Old Continent.
Will the European Commission reverse its decision? Nothing is less sure. But perhaps the additional customs duties will not be as heavy as expected.
Read also. New customs duties: will the prices of electric cars increase?
