PREAMBLE
In October 2023, the EU initiated an anti-subsidy investigation into the export of Chinese electric vehicles (EVs) to Europe. On 12 June 2024, the EU announced its provisional tariffs on electric vehicles imported from China, which are scheduled to be enforced by member states’ customs from 4 July.
The current tariffs announced by the EU for Chinese EVs clearly exceed the WTO's default range and are highly damaging to EU-China EV trade. They go beyond the scope of levying appropriate anti-subsidy tariffs to maintain a level playing field and have significant protectionist and political overtones.
Faced with this outcome, what should China do —surrender or fight back? [束手就擒还是奋起反抗?]
Jian Junbo (简军波) - Deputy director of the Centre for China-Europe Relations, Fudan University
Research - opinionated that China can adopt both a soft and a hard approach:
Key Points
EU tariffs on EV imports from China are politically motivated, contravene WTO rules and exceed Brussels’ stated goal of levelling the playing field.
The risk is that other countries in the world, particularly those with car manufacturing capabilities, will now follow suit.
Two responses should be adopted: one soft, one hard.
Soft response:
Continue negotiations with the EU and discussions with individual member states.
File a complaint with the WTO to encourage negotiations with Brussels and help make China’s case internationally.
Adjust China’s subsidy practices and align them a little more with what is done in the West.
Increase imports of goods from certain (China-friendly?/tariff-sceptic?) EU member states.
Hard response:
Take into account France’s strong backing of this anti-subsidy investigation and subsequent tariffs.
Contemplate tariffs on EU agricultural products, wine, cars and Airbus goods and services.
Chinese EV firms should:
Cooperate with future EU anti-subsidy investigations
Preserve their competitive advantage over other EV producers by cutting profit margins.
Increase greenfield and brownfield investments both within and outside of the EU to help circumvent tariffs.
Focus on other export markets in Asia, Latin America and Africa.
Jian concludes: “As long as our car manufacturers stabilise their positions, lay down solid foundations, hone their skills diligently and make steady progress, we will eventually stand invincible regardless of how the other side adjusts its policies and suppresses us. We must have this confidence.”
Originally published by The Paper on 14.06.2024 as
EU TO IMPOSE TARIFFS ON CHINESE ELECTRIC VEHICLES, CHINA CAN RESPOND IN TWO WAYS
Jian Junbo (简军波)Reposted in
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