Ten EU states give green light to additional tariffs on Chinese electric vehicles – World

BRUSSELS: EU countries on Friday gave the final green light to significant additional tariffs on electric cars made in China, despite strong German opposition and fears it could trigger a trade war with Beijing.

The European Commission – which provisionally approved the measure in June after an investigation found Beijing’s state aid to carmakers was unfair – now has carte blanche to impose high tariffs for five years from from the end of October.

China has criticized “protectionist” tariffs and promised retaliation, but negotiations on resolving the subsidy dispute will continue between the two sides despite Friday’s vote.

Berlin opposes the move, saying it would trigger a trade war with Beijing

Ten member states, including France, Italy and Poland, supported imposing tariffs of up to 35.3 percent, on top of existing duties of 10 percent, several EU diplomats said . AFP.

Only five, including Germany and Hungary, voted against while 12 abstained, including Sweden and Spain. Madrid initially supported the tariffs before backtracking to call on Brussels to “reconsider” its decision.

Although the tariffs did not gain support from a majority of states, there was not enough opposition to block them — which would have required at least 15 states representing 65 percent of the bloc’s population.

That leaves the choice of moving forward in the hands of the European Commission – in charge of the bloc’s trade policy – ​​which said it had “obtained the necessary support for the adoption of tariffs”.

After the vote, China’s Commerce Ministry urged EU states to “get back on track” by resolving trade frictions through dialogue.

“China firmly opposes the EU’s unfair, non-compliant and unreasonable protectionist practices in this matter,” it said in a statement shared by state broadcaster CCTV.

“Fatal signal”

The EU taxes have pitted France and Germany against each other, with Paris saying they are necessary to level the playing field between European automakers and their Chinese counterparts.

Germany, known for its strong auto industry and major manufacturers including BMW, Volkswagen and Mercedes, have invested heavily in China, urged the commission not to move forward.

The vote results demonstrate how the EU’s biggest trade probe in years has ruffled feathers, with the bloc’s biggest economy vehemently opposing the tariffs.

“The European Commission should not trigger a trade war despite voting in favor” of customs duties, said German Finance Minister Christian Lindner. “We need a negotiated solution.” Berlin has strong arguments in its favor: Beijing has threatened to retaliate harshly and has already opened investigations into European brandy, dairy and pork products imported into China.

“We will face all kinds of retaliation from China, that’s for sure,” one diplomat said.

China has tried in vain to prevent these rights from coming into force through dialogue, but negotiations have so far failed to produce an agreement satisfactory to the EU.

All duties could be lifted later if China addresses EU concerns.

Automakers divided

French and German automakers are also divided on the tasks at hand.

German car giant Volkswagen said it was “the wrong approach”, while BMW said the vote was “a fatal signal for the European car industry”.

Both manufacturers have called for more negotiations to avoid a trade conflict.

Meanwhile, US-French-Italian automotive group Stellantis said it “takes note” of the vote, reiterating its commitment to “free and fair competition”, echoing similar cautious comments made by the umbrella group, the Association of European Automobile Manufacturers.

The additional duties also apply, at different rates, to vehicles manufactured in China by foreign groups such as Tesla, which faces a tariff of 7.8%.

Published in Dawn, October 5, 2024