The EU increased tariffs on Chinese-built EVs to as much as 45.3% last October, but Brussels and Beijing have floated the idea of lifting the tariffs through possible commitments to minimum prices, known as price undertakings for imported cars.
The European Commission has said it is willing to continue negotiating an alternative to tariffs with China, which included tariffs of 17.0% for vehicles made by BYD, 18.8% for Geely and 35.3% for SAIC, on top of the EU’s standard car import duty of 10%.
Oh come on! Who do they think they are kidding? BYD may offer a model at the same price point as a VW iD4, but it would be trimmed and featured like a high end Mercedes inside.
There’s no way that Germany can agree to this. It would destroy their auto industry. Expect some issues to pop up that’ll delay this effort for some time.
Of course, that just highlights one of the overall EU issues. Out of 27 EU countries, only 2 or 3 have a meaningful auto industry, so why should those without an auto industry buy cars that are made in the EU instead of buying cars that are made in China for 20 to 50% less?
The EU automotive sector, a historical industrial sector with strong regional ties… The EU automotive industry employs 13.8 million people (directly and indirectly), representing 6.1 % of total EU employment. The industry accounts for 8 % of European manufacturing value added. https://www.europarl.europa.eu/RegData/etudes/ATAG/2024/762419/EPRS_ATA(2024)762419_EN.pd
Europe successfully defended/protected its auto industry from Japan, which could easily have wiped it out. Japan was extremely predatory mercantilist from 1960 to 1990.
But now they (the leaders and elites, anyway) are ready to destroy it all, for cheap EVs, or to intentionally de-industrialize. And this for the benefit of China, which is not just predatory, but also an extremely repressive dictatorship.
The working population might not want this sort of worst of all worlds outcome.
As the trade confrontation between the US and China escalates, Chinese companies will come under increased pressure to dump their excess production in Europe…
“These goods showing up in Europe could have both a deflationary and a contractionary impact because they would crowd out local products,” European Central Bank executive board member Piero Cipollone said in a February interview published on the ECB’s website.
“As the trade confrontation between the US and China escalates, Chinese companies will come under increased pressure to dump their excess production in Europe…”