July 19, 2024 | 10:42

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China announces retaliation against EU tariffs on electric cars

Mairenis Gomez

June 13, 2024 | 3:30 pm

Xi Jinping's government threatens 25% tariffs on large-displacement cars from the EU

The recent imposition of tariffs by the European Union to electric vehicles coming from China has generated a strong response from the Chinese government. This move, seen as a "typical case of protectionism" by Beijing, has not gone unnoticed and promises to trigger a series of measures that could significantly affect European manufacturers.

The spokesperson for the Ministry of Foreign Affairs, Lin Jian, has highlighted the need for the EU to fulfill its commitment to support free trade and avoid protectionism.

From China, the position of the European Union is strongly criticized in relation to the government subsidies that the Chinese government offers to its automobile industry and the excess capacity in the sector. This trade conflict threatens to escalate, affecting several high-profile European brands.

Increase in tariffs as a response from the Chinese Government

Xi Jinping's government has expressed its willingness to impose additional tariffs of up to 25% on imported cars with large displacement engines, increasing by 10% over the existing 15%. This measure would have a considerable impact on brands such as Mercedes-Benz and BMW, which are at the center of this trade dispute.

In addition to possible tariffs, Beijing has reiterated its criticism of European complaints about subsidies and overcapacity in the Chinese auto sector. A representative of the Chinese Ministry of Commerce, Ding Weishun, has highlighted that the construction of factories by Chinese companies in Europe reflects the complementary advantages and the mutual benefit of cooperation between China and Europe.

Who is affected by the measures?

The European Union's decision to impose tariffs ranging from 17,4% for BYD to 38,1% for SAIC, including 20% ​​for Geely, has provoked strong rejection from China. In the last year, China has doubled its market share in the EU, selling cars worth 10.000 billion euros, increasing the tension in this conflict.

In addition, other countries have also adopted similar measures against the Chinese automobile sector. Turkey has increased tariffs by 40% in an attempt to slow trade and reduce its current account deficit. In parallel, the United States has announced that it will apply tariffs of 25% to 100% on the import of Chinese electric vehicles starting August 1. These increases will also affect the purchase of batteries, microchips and medical products, following guidelines from the US Trade Representative's office.

China responds to the increase in EU tariffs on electric cars

The impact of these measures is significant, not only for the brands affected, but for the global economy as a whole.

Without a doubt, the escalation in trade tensions between the European Union and China could have far-reaching consequences, affecting various industries and markets. The need to find a balance between protectionism and free trade is more crucial than ever. Meanwhile, consumers and manufacturers wait with uncertainty for the outcome of this conflict.

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