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Chinese automakers look for retaliatory tariffs on EU cars and trucks, state media reports

Chinese car manufacturers have prompted Beijing to trek tariffs on imported European gasolinepowered cars in retaliation for Brussels' curbs on exports of Chinesemade EVs, the statebacked Global Times newspaper said on Wednesday.

In a closed-door meeting on Tuesday also went to by European car business, China's vehicle market contacted the federal government to embrace firm countermeasures (and) suggested that favorable consideration be offered to raising the provisional tariff on gas vehicles with large-displacement engines, according to the report.

The meeting, organised by China's Ministry of Commerce, was held in Beijing and gone to by SAIC, BYD , BMW, Volkswagen and its Porsche department, 2 individuals with direct knowledge of the matter stated.

The main objective of the meeting was to put pressure on Europe and lobby versus the tariffs Brussels announced last week to guard its car industry from Chinese competitors, they added.

The conference was likewise participated in by Mercedes-Benz, Stellantis and Renault, two separate sources familiar with the matter told .

The ministry did not instantly react to a faxed demand for remark.

BMW, Volkswagen, Stellantis and Renault decreased to comment.

A spokesperson for Mercedes-Benz stated the group supports a liberal trade program based on WTO rules.

Against the background of globalisation and the financial interdependencies of our time, the motto for securing success and peace is: dialogue and positive cooperation. We are depending on the efforts of politicians to continue this dialogue.

Market insiders state both Europe and China have factors for wanting to strike a deal in the months ahead to de-escalate stress and prevent the addition of billions of dollars in new costs for Chinese EV makers, as the EU process permits evaluation.

' TARIFF WAR'

The announcement to enforce tariffs might activate talks in between Brussels and Beijing that are focused on avoiding them, said Stefan Hartung, CEO of Bosch, the world's largest automobile provider.

The European Commission said on Wednesday it was looking into the scenario with a view to going over if an equally agreeable option can be found.

EU trade policy is turning progressively protective amid issues that China's production-focused, debt-driven advancement design might see the 27-member bloc flooded with cheap items, including electrical vehicles, as Chinese firms look to boost sales overseas due to weak need in the house.

The European Commission's June 12 statement that it would impose anti-subsidy responsibilities of as much as 38.1% on imported Chinese EVs from July followed a relocation by the United States to trek tariffs on Chinese automobiles in May, and opens a brand-new front in the West's trade war with Beijing.

Personally, I think it is unfair to start a tariff war entirely on the basis of (China's) capacity utilisation rate and insufficient need for China's brand-new energy lorries, said Zhang Yansheng, primary research study fellow, China Center for International Economic Exchanges.

We can see that China has actually embraced a plan of policies to fix the 'overcapacity' issue, so this year, next year, and into the next four years, China's capacity utilisation will continue to rise, he included.

The Global Times first reported late last month that a. Chinese government-affiliated automobile research study centre was. recommending China raise its import tariffs on imported gas. sedans and sport utility automobiles with engines larger than 2.5. litres to 25%, from the current rate of 15%.

Chinese authorities have formerly meant possible. retaliatory steps through state media commentaries and. interviews with industry figures.

HOSTILE HINTS

The exact same newspaper last month also hinted that Chinese. business prepared to ask authorities to open an anti-dumping. examination into European pork products, which China's. commerce ministry on Monday revealed it would undertake.

It has likewise advised Beijing to check out EU dairy imports.

Exports of traveler cars with engines bigger than 2.5. liters from Europe to China amounted to 196,000 systems in 2023, up. 11% year-on-year, according to data from China Passenger Car. Association. In the very first four months of 2024, exports of such. lorries from Europe to China stood at 44,000 systems, down 12%. from the very same period a year ago.

EU vehicle exports to China were worth 19.4 billion euros. ($ 20.8 billion) in 2023, while the bloc purchased 9.7 billion euros. of electrical vehicles from China, according to EU data. agency figures.

China represent about 30% of German carmakers' sales, and. Germany is by far the biggest exporter of automobiles with engines. of 2.5 litres or above, having actually shipped $1.2 billion worth to. China considering that the start of this year, Chinese custom-mades data. shows.

Mercedes Benz's big-sized GLE Class SUV, S Class sedans and. Porsche's Cayenne are the 3 most popular imported vehicles from. Europe in China, the 3 of which represented more than. one-fifth of the overall 155,841 imported cars of European brand names. in the very first 5 months, according to data tracked by China. Merchants Bank International.

Slovakia is China's fourth-largest and the EU's. second-biggest provider of cars with large engines. This year it. has actually exported $803 million worth of sport utility automobiles.

The United States, the United Kingdom and Japan all likewise. export large numbers of cars with engines larger than 2.5. liters, and would most likely stand to benefit most from the. proposed tariff increase. ($ 1 = 0.9314 euros)

(source: Reuters)