No Winners in EU Tariff Hikes on Chinese EVs
The European Union voted on October 4 to impose tariffs on China-made electric vehicles (EVs), announcing the move has received support from its member states.
The new tariffs, as high as 45 percent, will come into effect on October 31 and last for at least five years. While 10 member states supported the measure, 12 abstained, and another five voted against the tariffs, revealing divisions and hesitancy on this issue within EU member states.
Outcries against the tariff have come from many quarters. With a third of their sales in China last year, German carmakers opposed the tariffs.
IG Metall, the largest German labour union and employee representatives of the nation's major carmakers, said in a statement: "We say unequivocally: tariffs are the wrong approach because they will not improve the competitiveness of the European automotive industry."
"Tariffs on Chinese EVs would be wrong ... We have to speak plainly and negotiate with China — but trade wars only have losers," said German Finance Minister Christian Lindner on social media platform X.
J?rn Fleck, senior director of the Europe Center, said that these EV tariffs and any potential Chinese retaliation will be much more impactful in Europe than in the U.S. — and not just to the European auto industry but also to other key industries and supply chains across the continent, according to the American think tank Atlantic Council.
An EU duty on EVs from China is a mistake and will do more harm than good, said Bruegel, a Brussels-based economic think tank, "They will harm EU citizens more than help them, and they will eventually backfire on the European automotive industry," said Bruegel.
European countries will emerge as the losers if the EU imposes additional tariffs on Chinese EVs, warned Ferdinand Dudenh?ffer, director of the Center for Automotive Research, adding that it would be detrimental to European automakers.
China is a leader in EVs, autonomous driving, intelligent networking and other fields, Dudenh?ffer said, adding that only cooperation between Europe and China can benefit both sides.
Advanced technology, components that enhance user experience, and the strength of exterior and interior styling are the reasons. Chinese brands are gaining appeal on the global market. A study by the World Economic Forum suggested that respondents are far less confident in the West when it comes to how quickly and aggressively EV challenges are being addressed. "In the U.S., for instance, 43 percent of EV intenders say there are not enough places to plug a car in (that number is lower by nearly one-third in China, where millions of chargers are in service)," it said.
Currently, the EU Commission continues to call on the two sides to explore an alternative solution. As the new tariffs are expected to go into effect on October 31, the EU still has time to have a change of heart.