The first episode of this programme that aims to decode the European Union (EU) legislative process explains why the European automotive industry is at a critical crossroads. Will tariffs on Chinese electric vehicles help competitiveness or trigger a trade war?
Chinese electric cars sold in the EU quadrupled between 2020 and 2023, reaching a market share of almost 9%. Next year, they could represent 17%, according to estimates by the European Commission (EC), which decided to apply higher customs tariffs in order to rebalance the scales.
EU DECODED explores how this decision was reached, what the pros and cons are and the possible future implications with data and analysis from experts on the subject, while also hearing the opinions of some European citizens.
“The EC has found an ecosystem of subsidies: cheap loans, subsidies, tax cuts, etc. All of this helps Chinese companies to reduce the prices of their electric vehicles and sell them abroad with a clear advantage,” explained Jorge Liboreiro, a Euronews journalist who covers international trade issues.
To bring the prices of Chinese vehicles closer to those charged by European companies, the EC will add to the current 10% tariff values ??ranging from 7.8% to 35.3%, depending on the brand.
Bernd Lange, chairman of the European Parliament’s International Trade Committee, said that “the aim is to find a solution to avoid illegal subsidies, so that we truly have a level playing field on the market.”
A trade war in the offing?
Lange is not worried about a trade war, despite China opening similar investigations into European products exported to its market. “China is betting a bit on so-called countermeasures. But we can always present the case to the World Trade Organization,” said the German MEP in an interview with EU DECODED.
But it was precisely the fear of a trade war that led Germany, the largest automotive industry in the EU and one of the largest in the world, to vote against the measure, as well as four other of the 27 Member States.
Don’t miss the programme that explains in detail how this measure could affect an industry that employs 13.8 million Europeans and accounts for more than 7% of the EU’s wealth produced in one year.
Journalist: Isabel Marques da Silva
Production: Pilar Monteiro López
Video production: Zacharia Vigneron
Editorial coordination: Ana Lázaro Bosch and Jeremy Fleming-Jones
