AutoBeta(AutoBeta.net)10/15 Report--

On October 4th the European Union voted on whether to impose a five-year countervailing duty on Chinese electric vehicles. The European Commission's proposal to impose tariffs on Chinese imports of pure electric vehicles has won the necessary support of EU member states, according to a statement issued by the European Commission (hereinafter referred to as "the European Commission"). Decided to impose tariffs of up to 45% on electric vehicles imported from China. However, the European Commission also said in a statement that the EU and China will continue their efforts to explore alternative solutions. The solution must be in full compliance with WTO regulations, fully address the damaging subsidies identified by the Commission's investigation, and be monitored and enforceable. In other words, even if the proposal to impose tariffs is passed, the European Commission will continue to negotiate with China and continue to review the proposed tariff alternatives.

It is understood that if the above tariff bill is to be blocked, at least 15 of the 27 member states of the EU need to vote against it, and the total population of these member states accounts for at least 65% of the total population of the European Union. EU sources said that in the vote, 10 EU member states supported the imposition of tariffs, 5 voted against it and 12 abstained.

N 10 countries are in favour: France, Italy, the Netherlands, Poland, Denmark, Ireland, Bulgaria, Estonia, Lithuania and Latvia

N 12 abstaining: Belgium, Czech Republic, Greece, Spain, Croatia, Cyprus, Luxembourg, Austria, Portugal, Romania, Sweden and Finland

N 5 countries against: Germany, Hungary, Malta, Slovenia and Slovakia

Prior to this, many European parties strongly opposed the EU's imposition of tariffs on Chinese electric vehicles, believing that this was not conducive to the competitiveness of European car companies and the EU's goal of green transformation, and called for continued negotiations with China.

Since the European Commission launched an unreasonable investigation into electric vehicles in China, Germany has been campaigning against EU tariffs on electric vehicles in China. German Chancellor Schultz said before the vote that Germany opposes EU tariffs on Chinese electric vehicles and that Europe must continue negotiations with China. German Finance Minister Lindner said on the 4th that the European Commission should not trigger a trade war, "We need to negotiate a solution."

Not only the German government, but also the German industry is actively speaking out. On October 3, representatives of German trade unions and industry employees publicly issued a "joint statement of opposition", explicitly opposing the EU's imposition of tariffs on Chinese electric vehicles, saying that this "wrong path" would not solve the EU's own problems.

The voices of opposition are not only these. Not long ago, officials from Spain, Hungary, Finland and other countries also called on the EU to resolve the issue through negotiations. Hungarian Prime Minister Orban said that Hungary opposes the EU's move to impose tariffs, which will damage the EU's own competitiveness. Hungarian Minister of Foreign Affairs and Foreign economy Sealdo said that Hungary voted "firmly against" the EU's proposal to impose tariffs.

On October 4, 2023, the European Commission launched a countervailing investigation into electric vehicles imported from China. On July 4, 2024, the European Commission began to impose temporary countervailing duties on Chinese electric vehicles. On August 20, 2024, the European Union released the final draft of the countervailing investigation on electric vehicles in China, showing that it intends to impose countervailing duties of 17% to 36.3% on electric vehicles in China.

According to the final draft, BYD will be levied 17 per cent countervailing duty on the three Chinese car companies sampled by the EU, Geely Motor will be levied 18.8 per cent countervailing duty and SAIC will be levied 35.3 per cent countervailing duty. Other Chinese car companies that do not accept a sample survey but cooperate with the EU investigation will be subject to a countervailing duty of 20.7 per cent, while other Chinese car companies that do not cooperate with the EU investigation will be subject to a countervailing duty of 35.3 per cent. It should be noted that this is a maximum tariff of 35.3% in addition to the original 10% tariff!

In response, a spokesman for the Chinese Ministry of Commerce said that China firmly opposes the unfair, irregular and unreasonable protectionist practices of the European side in this case, and firmly opposes the European side imposing countervailing duties on Chinese electric vehicles.

It is understood that the European Commission will make a final ruling on China's electric vehicle countervailing in November. For China and the EU, it is still possible to solve the problem through negotiations. When Minister of Commerce Wang Wentao visited Europe, the Chinese side also hoped to move toward each other with the attitude of consultation, and many issues could be discussed, but if the political will of the European side was only in words and not in deeds, it would be very difficult to talk about.

In fact, from the argument mentioned by the European side that "even the final ruling will not affect the continuation of talks with the Chinese side," we can see that the European side has a "small mind"-it not only wants to retain the "right" to launch unreasonable investigations, but also worried about losing the opportunity to introduce Chinese capital and technology. China's attitude is also clear that countries that support taxation will lose investment. The European side has always used tariff reduction as a "bargaining chip" for negotiations, but the amount of tariffs is not the focus, and the act of imposing tariffs itself is the focus. An open and fair market environment is the most favorable factor to attract investment. The EU cannot impose tariffs on Chinese products and expect Chinese enterprises to invest and cooperate in Europe at the same time. During the period of final adjudication, those EU countries that voted yes are the last window to seize the opportunity of new energy transformation, and it depends on themselves whether they can grasp it or not.

In response to the EU vote to pass the final draft of the anti-subsidy case for electric vehicles, a spokesman for the Chinese Ministry of Commerce said on the 4th that China firmly opposes the final draft of the European side and urges the European side to return to the right track of resolving trade frictions through negotiations. The spokesman said that China firmly opposes the unfair, irregular and unreasonable protectionist practices of the European side in the anti-subsidy case against China's electric vehicles, and firmly opposes the imposition of countervailing duties on Chinese electric vehicles by the European side. The protectionist practices of the European side seriously violate WTO rules and interfere with the normal international trade order, which not only hinders China-EU trade and investment cooperation and slows down the EU's own green transformation process, but also affects global efforts to deal with climate change. China urges the European side to really show practical action to implement political will and return to the right track of resolving trade frictions through consultations. China will also take all measures to firmly safeguard the interests of Chinese enterprises.

Geely Holdings, one of the companies affected by the tariffs, issued a statement saying it was very disappointed with the European Commission's decision. Geely Holdings said the decision to impose countervailing duties was not constructive and would hinder economic and trade relations between the EU and China, ultimately harming the interests of European companies and consumers. Geely Holdings Group said that it will always support free trade, advocate fair competition, strictly abide by the laws and regulations of various countries in the world, and provide excellent products and services to users around the world.

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