Is it "smart" or "confused"? The EU plans to impose tariffs on Chinese electric vehicles

The electric vehicle industry is not only the focus of global automotive industry development, but also a hot spot of global automotive industry competition. However, in recent days, the European Union has posed a problem to the development of this industry.

On June 12, local time, the European Commission issued a statement that it plans to impose temporary anti-subsidy duties on electric vehicles imported from China from July 4. In fact, before the European Commission officially announced this decision on the 12th, it had been leaking information through the media to test the outside world's reaction. But the fact is that the widespread concerns caused by this move were beyond the European Commission's expectations.

Chinese Foreign Ministry spokesman Lin Jian hosted a regular press conference on June 13. During the press conference, Lin Jian once again responded to whether China would introduce countermeasures.

Lin Jian said that China has principles that must be defended, namely the WTO rules and market principles, and also interests that must be maintained, namely the legitimate rights and interests of China's electric vehicle industry and enterprises. To this end, we will resolutely take all necessary measures.

Peng Gang, Minister of the Chinese Mission to the European Union, told the outside world on the 14th that only fair, good and effective competition can improve the competitiveness of enterprises and markets. Chinese products and enterprises coming to Europe will bring healthy competition to Europe, thereby improving the competitiveness of European enterprises and promoting European scientific and technological development, corporate strength and people's well-being.

Fang Dongkui, representative of the European Union Chamber of Commerce in China, told CCTV reporters that China's electric vehicle industry not only helps China fulfill its own emission reduction commitments, but electric vehicles exported to the EU also play an important role in reducing the EU's carbon emissions. The EU's current practice runs counter to its own claims to achieve carbon peak and carbon neutrality.

Fang Dongkui, Secretary General of the European Union Chamber of Commerce in China: We call on the European side to listen rationally to the voices of all parties, including those of European automobile companies. We can play a due role in maintaining the stability of the global supply chain from the overall situation of China-EU economic and trade development and the goal of green and low-carbon development, and let Chinese new energy vehicles play a role in promoting global green development goals.

T&E, a European professional organization that studies clean energy transportation, believes that the EU should not try to protect its automakers from meaningful competition because this will limit Europeans from buying affordable electric vehicles. The organization pointed out that while raising tariffs, European governments should promote the production of electric vehicles, otherwise it will jeopardize the EU's goal of achieving 100% clean vehicles by 2035.

△ Screenshot of an article on the website of T&E, a professional organization in Europe that studies clean energy transportation

In March this year, it was this agency that made a forecast that, based on the fact that nearly one-fifth of electric vehicles sold in Europe last year were made in China, this proportion is expected to reach one-quarter by the end of 2024.

There is only a fine line between being smart and being foolish

Several EU countries have proposed the concept of carbon neutrality a long time ago, and Chinese electric vehicles meet the needs of these countries both in terms of technology and cost. Today, the EU insists that China's electric vehicle industry has "high subsidies", which is not conducive to the carbon neutrality plan. It is puzzling.

Pichocinski, who once served as Poland's Deputy Prime Minister and Minister of Economy, saw the essence of the problem. Pichocinski pointed out that the decision made by the European Commission was too hasty. It was illogical to ignore the cost control of other countries and companies.

Piechowski, former Deputy Prime Minister and Minister of Economy of Poland: I have served as Minister of Economy and Deputy Prime Minister who coordinated Poland's economic policies. I am also an expert and analyst in the economic field. I am pessimistic about the act of increasing tariffs on Chinese electric vehicles. Because what we need today is not a trade war, but to improve efficiency, improve skills and reduce costs. But the EU made such a hasty and simple decision. Now some people think that the low cost of goods produced in some countries may be due to some hidden subsidies or other preferential policies, rather than because these countries and companies have more effective and rational cost control. This should not be the way Europe should go. Europe has entered an era of competition with Asian cars. In the 1970s, when Korean and Japanese cars appeared in Europe, there was similar competition. Europe used raising tariffs to solve the problem at that time. What was the result? In the end, it is still necessary to improve the quality of its own products.

The “spillover effect” will bring challenges to China-EU economic and trade relations

The European Union Chamber of Commerce in China said in a statement that the additional tariffs will not only seriously damage the legitimate rights and interests of Chinese and European automobile companies and automobile supply chain companies, distort the fair competition environment of Chinese electric vehicle companies in the European market, but will also impact the normal economic and trade exchanges between China and Europe in the automobile and related fields. Its "spillover effect" will bring challenges to China-EU economic and trade relations and bilateral relations.

In this regard, De Witte, chairman of the Belgian China Economic and Trade Committee, also believes that the EU's move will have an impact on the China-EU automotive sector and China-EU economic and trade relations.

Chairman of the Belgian-China Economic and Trade Committee De Witte: Europe needs to be very cautious when imposing additional tariffs on imports from China or other countries, because China and other countries may also take the same measures against our products. We must also be aware that there are a certain number of automakers in Europe, such as German automakers, who are very active in the Chinese market, so we must be vigilant that there is always a risk of retaliatory measures.

It is worth noting that the temporary tariffs disclosed by the European Commission on the 12th are not the final result, and there are still many variables. First, before July 4, the European Commission will also negotiate with the Chinese government and listen to the "complaints" of relevant companies. In other words, the nearly three weeks before the 4th of next month is the negotiation window period. In addition, the European Commission and the 27 member states need to reach an agreement from temporary tariffs to formal tariffs.

After the EU disclosed the additional tariffs on Chinese electric vehicles, Hungary, one of the EU member states, took the lead in expressing its position. Hungarian Economy Minister Nagy Marton said in a government statement on the 13th that Hungary disagrees with the EU's additional tariffs on Chinese electric vehicles. Protectionism is not a solution. On the contrary, cooperation and free market competition are what the EU needs.

At the same time, the German Association of the Automotive Industry and Germany's three major automakers - Mercedes-Benz Group, BMW Group and Volkswagen Group - all issued statements on the preliminary results of the EU's anti-subsidy investigation, calling it a "wrong decision."

△ Screenshot of the original statement sent by NIO to reporters

In addition, NIO issued a statement in response to a reporter's interview, saying that NIO strongly opposes the use of tariffs to block the normal trade of electric vehicles around the world, which is an obstacle rather than a promotion for global environmental protection, emission reduction and sustainable development. NIO will not be shaken by protectionism in its determination to develop in the global market in the long run.

It is not uncommon for the European Commission to seek political benefits by means of "imposing tariffs". China's electric vehicles have a complete industrial chain and operation model, so they are not only low in price, but also higher in quality and configuration than overseas models, which are of great appeal to EU consumers. Will the EU's "smart" operation put the development of Chinese electric vehicles in trouble? Perhaps such "smartness" only exposes its own confusion. The EU's confusion lies precisely in using tariff protection to delay or even cover up its own lack of successors in the new energy track. The EU's "smart" operation is likely to be another farce of self-destruction and self-destruction.