The US has been in the lead with higher tariff barriers and controls on high-tech exports, initiated under the Trump presidency and markedly intensified by Biden.
It is now being joined by the European Union, which this week imposed an additional tariff of 35 percent on Chinese electric vehicles on top of a 10 percent tariff already in force.
The new measures, which will come into force next week, are to last five years. They were introduced on the basis that Chinese EV makers were benefiting unfairly from state subsidies.
The Chinese government rejected the claim of undue state support, saying it would “continue to take all necessary measures to resolutely safeguard the legitimate rights and interests of all Chinese companies.”
The decision to impose the tariffs came after eight rounds of talks aimed at trying to devise a mechanism through which a minimum price could be set along with the volume of Chinese exports. But the talks broke down with both sides saying the differences remained significant.
Further talks are to be held, with the EU accepting an invitation by China to send envoys to Beijing to see if some agreement can be reached on these mechanisms.
The divisions within the EU, which must rank as some of the most significant on trade issues in the history of the Union, were underscored by comments from Germany. Hildegarde Müller, the head of the German auto industry association, VDA, said the decision was “a setback for free global trade and so for prosperity and Europe’s growth.”
The chief executive of BMW Oliver Zipse said protectionism would only make cars more expensive for consumers and accelerate plant closures in Europe.
The interconnectedness of the global car industry was indicated by Roberto Vavassori, who told the Financial Times (FT) that “for many suppliers in the automotive industry, [the Chinese] are both the biggest threat and the biggest customer.”
He asked: “What did the Chinese do, what did the Japanese do and what did the Koreans do when they were behind on technology? They collaborated. The European industry needs to get the Chinese to localise in Europe and it needs to collaborate with them, particularly around battery technology in order to catch up.”
For workers in the auto industry, in Europe and internationally, neither path is the way forward in a situation where they face a wave of job destruction and wage cutting.
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Even German capitalists don’t want this, so who’s pushing for it? USA?
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Cowards
Turns out that the EU cares about a trade war with China a lot more than the environmental crisis. Why could’ve guessed.
Electric cars aren’t a solution to the environment crises unless they’ve replaced the rubber on the wheels, use less roads, and their construction uses less CO2
I don’t really know much about this, but this feels wrong.
Why punish consumers, we should be striving to make European cars cheaper not make Chinese ones more expensive.
I’m sure there are many European countries where the government funds progression in other industries.
We also let American companies take control of industries.
Well seems like all car companies are somewhat subsidized/supported. I don’t know how difficult to detangle the presumably many different levels of that are, especially internationally.
But if the EU were to subsidize “just” 500$ per car sold, and China 50.000$ per car, it would be impossible for european car makers to compete on an otherwise equal field.Now I have no Idea how supported which markets are, and I’d presume I grossly exaggerated the difference, and it may well be the other way around. I have not found detailed analysis of this though.
They don’t subsidise the export cars at all. They subsidise R&D and domestic sales (which in turn gives them more money for R&D as well). They also give low interest loans for setting up new factories that produce green products.
The EU should just do the same.
Should we? We can’t compete with Chinese labor laws and under paying workers
The Chinese auto worker is paid more than a Mexican one. Difference is the Chinese companies aren’t afraid of automation, and it has given them a financial cushion to develop better cars.
The average Chinese worker makes about $2.80 US/hour. What’s the Mexican pay rate?
Also, yes, total bullshit that Mexico is exempt from import tariffs and all our US manufacturers have been moving vehicle production down there.
the calculations that go into figuring out mexican payrates are questionable at best and they’re tantamount to cooking the books.
nevertheless; near shoring isn’t going to work. the mexican government is being strong armed by the american administration to grey rock near shoring as much as possible and i would expect verbiage to continue those grey rocking efforts to show up in the next usmca agreement in the near future.
it’ll be yet another cash grab that serves a few hundred already rich people at the expense of the mexican workers; rural america; the environment; and our future political stability and it will cheered on by the people who claim to want to protect all of those things.
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You’re telling us how propagandised other countries are, all while subscribing to this Lord of The Rings geopolitical narrative. You muppet.
Just tariff international shipping, it’s to cheap financially and it’s hurting the non-elite classes of exporting countries as well as the environment.
Free market my left testicle
I expect China comac to dethrone Boeing and Airbus in the next decade.
Basically I don’t really see eu/us in a good position at all - they can’t compete population wise
That is just not nice. Why not compete like a gentle man?
Tariffs aren’t the answer… I’ve seen some of the newer French cars and they look really amazing. They are an example of when companies have to compete in a free market.
Tariffs just hand the Chinese an even larger lead.
It depends.
I’ll use some abstracted and simplified version to explain my point of view.If Wakanda and Middle Earth mine Vibranium (which is Mithril btw), and both sell internationally for 100USD/kg+shipping, both get similar market share, depending on details like proximity to the customer, different grades, personal preferences etc.
Wakanda now invents a new mining laser, which reduces their cost/kg to 85USD/kg.
Middle Earth doesn’t want to lose the entire market and risk an uprising of the dwarves, as they just lost their entire industry. Middle Earth decides to pay the drwarves 20USD/kg of exported Mithril, so that they can try and improve their efficiency, and still keep their families fed.
Now Wakanda is undercut, and losing massive amounts of sales, Companies start layoffs, and Wakanda injects 20 Million USD in new refineries, increasing their output.
People not just internstionally but even in Middle Earth start buying Wakandan Vibranium. Instead of constantly increasing support, Middle earth decides to put Tariffs on Wakandan Vibranium, to protect at least the national market from Wakandan influence.
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After the Emissions Scandal and an estimated 10 thousand excess deaths a year in Europe because of diesel emissions: Fuck the European Auto Industry.
Their dragging of feet on moving to EV technology is also disgraceful.
And don’t get me started on the over-reliance on cars in most of Europe.
All in all, they’re a negative for Europe, not a positive, and if they can’t compete with the bloody Chinese, well, let the Free Market they so love for everything else do a little Constructive Destruction on them,
The Chinese never found a way to make profit in spite of radically lower prices
Source? Your dreams?
