Following the EU’s move to investigate China’s EV subsidies and the White House’s increase in tariffs on Chinese-made products, Beijing has threatened to impose retaliatory tariffs on imports of EU and US-made cars.
In a post on X, the Chinese Chamber of Commerce and Industry in the European Union (CCCEU) said: “We have been informed by an insider that China may consider raising interim tariffs on imported cars with large displacement engines.” said.
The CCCEU cited a Global Times interview with China’s chief auto strategy expert who claimed that provisional tariff rates could be raised by up to 25%.
Currently, the customs duty rate for cars imported into China is 15%.
On Wednesday, the stock prices of European luxury automakers such as Mercedes-Benz, BMW, Tata Motors (parent company of Jaguar Land Rover) and Volkswagen Group (parent company of Audi) rose as these automakers began producing larger-displacement engines. The price fell all at once because the cars equipped with it are exported to China.
China’s tariff threat means that Chinese government subsidies will lower the price of Chinese-made EVs imported into EU member states, thereby lowering the price of Chinese-made EVs imported into EU member states, thereby reducing EU membership. It began after the European Commission, the country’s enforcement agency, launched an investigation in October. Anti-dumping agreement of the WTO (World Trade Organization).
The deadline for the European Commission to impose tariffs is July 4, nine months after the investigation began. Valdis Dombrovskis, the European Commission’s trade chief, told Politico earlier this month that the investigation was “progressing.”
Last week, President Joe Biden announced new tariffs on a number of Chinese-made products, with tariffs on EVs from companies like BYD (BYDDY), Geely Automobile (GELYF), and NIO (NIO) ranging from 25% to 4x. It will be set to 100%. Vehicle costs.
Earlier on Wednesday, the Office of the U.S. Trade Representative posted a notice saying a 30-day public comment period on the tariffs would begin on May 29 and end on June 28. Tariffs on EVs and other products will begin as early as August 1st.
Although sales of Chinese-made EVs in the US are fairly small compared to other goods, the imposition of tariffs marks an escalation of the “US-China Cold War” and, naturally, China is threatening to intensify sanctions against both the US and the EU.
Calculations for European automakers operating in China are complicated by the fact that both brands rely on the Chinese market to sell their European luxury cars, while also seeking protection from Chinese brands in their home markets. It has become.
Automotive data firm Motor Intelligence reports that Chinese buyers purchased 3.09 million high-end luxury cars from European automakers in 2022, an increase of 6% from the previous year. Motor Intelligence predicts that China’s luxury car market will reach $154.7 billion in 2024 and grow to $181.5 billion by 2029.
Interestingly, some brands such as Audi, which has a large presence in China, are increasingly collaborating with local brands to enter the highly competitive EV market.
Audi announced on Monday that it has signed a contract with China’s state-run SAIC Motor Corporation to develop a new EV for the Chinese domestic market. Audi said the deal with SAIC Motor will start with three new EV models, with the first EV expected to hit the market in 2025.
Pras Subramanian is a reporter for Yahoo Finance. you can follow him twitter And even more Instagram.
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