'Pure retaliation' as China pressures EU electric car tariffs
10/10/2024 08:26 PM
A trade war between the world's largest car-making nations has erupted with China looking to hit back at heavy tariffs applied to Chinese-made vehicles in Europe.
Beijing has sent a salvo to European car makers who recently voted to impose heavy tariffs on electric cars imported from China – by examining a new tariff for cars brought into the world's largest car market.
According to Autonews, China is studying a case for increased tariffs in what's a response to recent tariffs applied by the European Union (EU), which are set to be finalised by 31 October 2024.
"China is studying measures including raising the tariffs on imported gasoline cars with a large engine capacity," a statement from China's Ministry of Commerce said, according to Autonews.
In September 2024 the 27 EU member nations voted on whether to increase tariffs for Chinese electric vehicles from the current 10 per cent to 45 per cent over the next five years – with the vote succeeding.
The statement from Beijing has been seen as a way of putting pressure on the 31 October EU decision as discussions between China and Brussels continue.
Australia does not apply tariffs on Chinese cars having signed a free trade agreement (FTA) with Beijing in 2015 with a flood of new brands and models arriving here in 2024.
The decision to apply higher tariffs in the EU comes after calls from car makers for a 'level playing field' given Beijing's subsidy of its automotive industry, with the tariffs varying between brands depending on state-backing.
China also sent a message by hitting EU brandy operations – most notably targeting France, where 99 per cent of exports land in China – with an 'anti-dumping probe'.
French President Emmanuel Macron described the move as "pure retaliation" to the electric vehicle tariffs, according to Autonews.
While Germany was one of the EU countries to vote against the China tariffs, it's set to be hit hardest if China were to apply tariffs of its own, given Germany's $US1.2 billion in internal combustion engine exports to China in 2023.
In May 2024 the US quadrupled its tariffs on Chinese-made electric vehicles from 25 to 100 per cent – on top of the standard 2.5 per cent import duty.
Tariffs also extended from completed Chinese-made electric cars to components including semi-conductors and batteries.
Republican presidential candidate Donald Trump promised to tax Chinese cars out of the US if he wins the US federal election on 5 November 2024.
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