The EU will impose additional tariffs of 17.4% to 38.1% on electric cars produced in China, the European Commission announced on Wednesday (12 June), as preliminary results from its anti-subsidy investigation confirmed prices are being distorted by Chinese state support.
The value chain of Chinese electric cars “benefits from unfair subsidisation, which is causing a threat of economic injury to EU battery electric vehicles producers,” EU Commission Vice-President Margaritis Schinas said on Wednesday (12 June).
“When our partners breach the rules, we will assert our rights,” Executive Vice-President Valdis Dombrovskis said in a statement.
“Today we have reached a milestone in our anti-subsidy investigation,” he said, adding that “this is based on clear evidence of our extensive investigation and in full respect of WTO rules.”
Duties will differ per carmaker, with Chinese state-owned manufacturer SAIC facing the highest duty at 38.1%, Chinese Geely to face 20% and BYD 17.4%.
I think that there was just no good choice in this matter. I mean, look at how great it turned out for Europe to bond together with Russia over cheap gas. I know that cheap gas and electric cars are not the same thing, by far, but still, if we got dumped by electric cars in China, we’d be wide open for economic attacks like it happened just a few years ago.
That said, I’d love if we compensated for this by finally shifting subsidies from flights to rail, or by shifting from 100LL to 100UL in general aviation, or cracking down on ships using bunker fuel.
Or put the screws on BMW and VW to pull their heads out their asses and start being competitive.
If this tariff went along with a law saying that all European cars had to be electric by a certain date, I’d feel like this was anything but just preserving Europe’s fossil fuel interests.
I mean there kind of is. As is stands, selling cars that emit CO2 will no longer be allowed after 2035. You could argue that that’s far too late, and I would agree, but there is a date and since car manufacturers usually plan ahead (I hope), there probably won’t be many fossil fuel-powered cars by then. It is, however, not strictly limited to electric cars. It just is not allowed to emit CO2.
Okay, fair. I was not aware of that.
In case you’re interested:
https://www.europarl.europa.eu/topics/en/article/20221019STO44572/eu-ban-on-sale-of-new-petrol-and-diesel-cars-from-2035-explained
Thank you!
Just adding: Wikipedia has a nice article including a map showing the current status of when countries plan to phase out fossil fuel vehicles. It also has a section on which manufacturers have pledged to do so.
https://en.m.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehicles
Long term politics seem to be a really good strategy for this. Notice how USA is marked as green, even if its only some states who have agreed to do so, and some countries are just grey. However, this is fine, because the manufacturers will still need to make the switch long beforehand in order to keep selling vehicles worldwide.
Tariffs are the most straightforward way to deal with dumping. Hard to fault the EU for this approach.
“Dumped”?
The fuck do you think China is doing? Donating EVs to charity?
Selling EVs below the profitable rate to corner a market and destroy competition. You know, the economic term “dumping”.
Below the profitable rate? Last I checked, Chinese EV manufacturers were either making money hand over fist or getting BTFO’s of the market by those that could.
Good for them. The point is not that they are doing “bad things”. “Dumping” is not a curse word, it’s an economic strategy, one that’s practised by a whole bunch of companies, and not just Chinese ones. When Auchan is selling watermelons at a rate where they barely make any money over a single sale - but make a ton of money on other stuff you get while shopping for watermelons, it destroys farmer’s markets, for example.
All I’m saying is that the choice before the EU leadership was either letting Chinese EVs into the market and risk getting into a position where Chinese companies - and by extension the Chinese government - can pull the levers on the EU car market, in exchange for us getting to buy cheaper EVs right now.
The EU - and you can fill in the blank whether they did it because they wanted to protect EU carmakers’ business, or they wanted to prevent another situation similar to the one with Russian gas - decided that the risk is not worth it. My guess is that some voted as they did because of the former, others because of the latter. That said, you can’t really say that the EU would be “crooked” for either of these things, as fighting for the EU car industry against other countries’ car industries is well within their mandate, as is protecting the EU’s strategic political autonomy.
It’s just how things are, like with the great firewall. If someone wants to sell software services to China, they have to conform to their standards. You can say it’s good or bad, but that’s just how things work. As a European, I don’t care about this specific issue either way, we should be buying fewer cars, electric or otherwise. People who live in places in the EU where you need cars because there’s no good public transport also tend to be living in places where you can’t afford to buy new anyway, not even at BYD prices.
I agree, dumping is well-defined. Here’s the problem, though:
Chinese EV manufacturers are selling their cars domestically for far less than they are in Europe. They’re already price-gouging their European customers. Moreover, only something like 10% of Chinese car production is made for export, and much of that is by European/American brands that are only producing in China because of the cost advantage. This is compared to 70% or more in the case of Germany and Japan.
There’s a far stronger case for overcapacity and dumping from Germany and Japan than there is for China. It’s an absurd bending of WTO rules to align with, as you said, protecting EU carmakers.
It’s protectionist policy, and that’s fine, but it should be clear to everyone that dumping and overcapacity are bullshit justifications for it. I absolutely agree with you that it should be a part of the EU mandate to protect EU workers and EU businesses. I don’t disagree with the tariff, I just don’t like the justification being given for it.