The EU will impose import tariffs on Chinese electric vehicles to promote negotiations

Tu Reuters/Tatiana Meel

The European Union Executive Committee is expected to impose tariffs on Chinese electric vehicles, which will promote negotiations between the two parties. Chinese corporate executives hope that negotiations can reduce their impact on the domestic electric vehicle industry.

It is expected that tariffs will bring billions of dollars of new costs to Chinese electric vehicle manufacturers.But both China and the European parties have reason to want to reach an agreement.

Chinese electric vehicle manufacturers need to open the European market to cope with the decline in domestic profit margins; German car companies hope to enter the Chinese automobile market and cooperate with Chinese electric vehicles to reduce costs.

Based on the trade data of 2023, on the basis of the current 10%tariffs, every 10%tariffs increased by the EU, Chinese electric vehicle exporters will lose about 1 billion US dollars.As Chinese electric vehicle manufacturers expand their exports to Europe, this cost will rise this year.

China has expressed preparation for future negotiations for alternatives.The EU's temporary tariffs may be challenged. If there are enough EU countries to oppose it four months later, it may even be canceled.

The EU China Chamber of Commerce stated last week that the Chinese government is considering increasing tariffs on large -displacement engine imports to 25%.The two people familiar with the matter said that China also proposed the idea of ​​reducing the import tariffs on EU vehicles from 15%to 10%.

The European Union Executive Committee has warned BYD, SAIC Group and Geely Motors, saying that they did not provide sufficient information for their anti -subsidy investigation.This may clear the road for the higher tariffs on these companies, and this will become a reference for taxes on other industries in China.

The EU China Chamber of Commerce said that the survey has been defective from the beginning, requiring Chinese auto manufacturers to provide information that cannot be provided.A person who understands the investigation says that this includes the detailed information of suppliers such as Ningde Times, and these suppliers are not within the scope of the investigation.In Ningde Times did not immediately respond to the comment request.

The EU China Chamber of Commerce may have a chance to negotiate in a statement to Reuters."The initiative may be in the European side."

Analysts expect both parties to seek an agreement.

The original expected temporary tariffs will be announced on June 5, but the German Mirror Weekly Magazine quoted sources familiar with the insider on Wednesday that the European Union Commission will postpone the decision after the European election on June 9.

In order to accelerate the launch of cheap electric vehicles, European auto manufacturers have cooperated with China's emerging electric vehicle manufacturers.Volkswagen and BMW promised to invest more than $ 5 billion in April this year, expanding their research and development and production in China.Trade data shows that nearly 29%of cars produced by German automakers in 2023 are sold in China.

Europe is the most important overseas market in Chinese electric vehicle manufacturers.Due to the fierce competition squeezing the profit margin of the Chinese market, BYD and other electric vehicle manufacturers in the European market are more than twice that of the Chinese market.Analysts said this left some space for the impact of improving tariffs.

Chinese electric vehicle manufacturers and suppliers are also investing in Europe.Xiaopeng Automobile entered the French market this month.The Amster Dan Weilai Center opened last week, and the founder Li Bin said he planned to continue to expand in Europe.

BYD is building an electric vehicle factory in Hungary and plans to build a second factory in Europe.Chery Automobile cooperated with Spain EV Motors to open the first European factory in Catalonia.

Battery manufacturer Ningde era expanded its capacity in Europe.China's new energy vehicle industry chain upstream and downstream companies have also attracted much attention to the participation of French "battery valleys".

German Prime Minister Tsurtz said when he visited China in April this year that Europe should put pressure on China to demand reduction of car import tariffs instead of provoking trade disputes.

CEOs of Mercedes-Benz and BMW, who accompanied Tsubles, to visit China, both opposed trade barriers and believed that German auto manufacturers could cope with China's competition.