Are punitive tariffs on Chinese EVs a good idea?
The EU Commission has announced plans to impose punitive tariffs on imports of Chinese electric vehicles from 1 July if no alternative agreement can be reached with Beijing. The tariffs will be as high as 38.1 percent depending on manufacturer and, according to Brussels, aims to prevent Chinese companies from flooding the EU market with heavily subsidised cheap e-cars. The EU is thus following the example of the US, which already imposes punitive tariffs of 100 percent on Chinese electric vehicles. Beijing has reacted with anger to the news.
Proof of a free and strong Europe
With its clear stance Brussels is refuting the arguments of the Eurosceptic parties, says La Croix:
“Of course China has denounced these decisions as protectionist and promised retaliatory measures. Of course the Germans are more interested than anyone else in reaching a consensus with Beijing, fearing that their powerful car industry could be undermined and warning of a trade war that could affect all European countries. This is clearly not the final twist in the tale, but the Commission's announcement is that of a strong and free Europe, one that the sovereignist parties would like to reduce to an empty shell.”
Don't lean too far out the window
Exaggerated criticism of China's subsidies is not only dangerous but also hypocritical, writes the daily Welt:
“Europe's farmers have been generously subsidised for decades, and export the subsidised products to China. ... In short: China could hit Europe's farmers hard by reacting to our car tariffs with agricultural tariffs. Other European products, from Airbus machines to animated films, as well as nuclear, solar and wind energy, have also been and continue to be subsidised. In an ideal world, there would be no subsidies. In the real world, all countries subsidise, including the US, which does it on a grand scale. In the WTO, there is a forum for discussing state aid and punitive tariffs with the aim of reducing both. This forum should be used.”
Avoid unnecessary confrontation
La Vanguardia urges caution:
“China is the world's largest producer in the electric sector and controls a very large share of the market for electric batteries. It is also pushing ahead with the construction of production centres in Europe in a bid to circumvent customs measures: the Chinese company Chery will manufacture at the former Nissan plant in Barcelona. Clearly, then, the battle for a sector of the future is intensifying, even if with a market share of 15 percent the electric car has barely established itself in Europe. ... The EU should set itself the goals of reindustrialisation and strategic autonomy and bear in mind that agreements can be more profitable than confrontation.”
Self-defence against unfair competition
El Mundo welcomes the measure:
“This is not protectionism, but legitimate self-defence. ... Brussels has proof that Chinese car manufacturers receive loans and tax breaks that give them an advantage against the Europeans. ... The decision to set tariffs at 38 percent avoids an all-out Washington-style trade war and gives Europe the opportunity to take its own approach to boosting an industrial policy which is losing competitiveness. The mass redundancies proposed by Ford and Vodafone in Spain are examples of the weakness of two industrial sectors particularly affected by the global transformation, and of the importance of improving the management of European funds in order to strengthen them.”
Consumers will pay the price
For the Frankfurter Rundschau the move is not without risks:
“Europe is walking a dangerous tightrope. What is being labelled as a 'proportionate' response in Europe's capitals is causing outrage in Beijing. There is a big risk that China will retaliate with its own tariffs, and thus of a tariff war between the world's second and third largest economies. Consumers will soon pay the price for the special tariffs: the extra costs will most likely be passed on to customers, at least in part. At the same time the pressure on European manufacturers to bring cheaper and better electric cars onto the market will decrease.”
The energy transition is at stake
This move could be harmful for the EU and the environment, warns Le Temps:
“In a European Union that is rarely united, Berlin is pretty hostile to protectionist measures. They could trigger a trade war in which companies like Volkswagen or BMW have a lot to lose since they have a far greater presence in China than their French counterparts. ... The stakes are high. It's not just the economic future of a Europe in decline that is on the line here, but also the energy transition: the more electric cars cost, the more the prospects of a rapid reduction in CO2 emissions recede into the distance.”
This won't stop China's triumphal march
The duties will achieve nothing, The Economist predicts:
“In the long run the tariffs could even hasten China's conquest of the European car market. To become significant forces on the continent, the Chinese companies were always going to have to produce their EVs locally. byd, which aims to become the region's top ev-maker by 2030, will build a factory in Hungary and is soon expected to announce another in Spain. Chery signed a deal in April also to make cars in Spain. Others are reportedly knocking on the door of big European contract manufacturers. ... Chinese carmakers, in other words, aren't going anywhere.”
Manufacturers missed the boat
For Kurier tariffs are distracting from the real problem:
“Walls are a tricky issue. They're built to ward off enemies. In the end, however, the builders of the wall might end up encasing themselves in concrete. Just like the communists once did in the Eastern Bloc. In the economy, customs duties are the walls. The EU Commission now wants to impose punitive tariffs on electric cars from China. Because electric cars from China are much cheaper than European cars. The aim is to protect European car manufacturers who missed the boat when it comes to developing e-mobility.”