According to a former general counsel of the Office of the United States Trade Representative ( USTR ), the new tariffs imposed on Chinese electric vehicles ( EVs ) wo n’t have a significant impact on imports from China.
According to Greta Peisch, a companion in the Wiley International Trade Practice, Chinese automakers are able to capture the EU’s weak tariffs and maintain successful margins in Europe in an interview with Asia Times.
In China, Chinese firms are selling their Vehicles for less money than in Europe. And when you compare the two different sticker costs, it appears that there is a lot of room for Taiwanese businesses to take that tariff, she said.  ,
They may still be able to offer their EVs in Europe with the same income margin that they would be able to make in China, she said, even if the price is likely set at 38 %.
She claimed that China’s market has a capacity-building slump that it can no longer capture, leading to the price decline of EVs in China. She said, for instance, that BYD sold an EV type in China for about US$ 12, 000.
In April 2023, BYD priced its Seagull subcompact EV, the company’s cheapest unit, at US$ 11, 400 in China. The concept, powered by a 55 watt electrical motor and a 30 kilowatt per minute battery pack, you move 305- 405 kilometers per charge. The battery allows the EV to charge up to 80 % in 30 minutes.  ,
Last month, BYD offered its Seagull EV Honor Edition at US$ 9, 700 in China. According to media reports, the business planned to sell the model for about 20 000 euros ( US$ 21.47 ) in Europe. Similar European EV models are priced at around 25, 000 to 30, 000 euros.  ,
In fact, the EU on Wednesday only imposed a 17.4 % tariff on BYD’s EVs. The Hong Kong- listed BYD shares rose 5.82 % to HK$ 232.8 ( US$ 29.8 ). The Hang Seng Index, the benchmark for Hong Kong stock market, only rose by 0.97 % to 18, 112.  ,
Germany’s opposition ,
The European Commission set up a 13-month investigation last October to find out whether government subsidies have helped Chinese EV manufacturers increase market share in Europe in recent years. Nine months after the investigation begins, it has the authority to impose provisional anti-subsidies.  ,
The EC announced on Wednesday that it has “provisionally concluded” that if discussions with Chinese EV manufacturers fail to produce a successful solution, they will be subject to tariffs starting on July 4.
EV makers who participated in the investigation will typically be subject to a 21 % duty, as per the EC’s decision, while those who did not will be subject to a 38 % duty.
Specific charges will apply to BYD ( 17.4 % ), Geely ( 20 % ) and SAIC ( 38.1 % ). These costs would be added to the 10 % tariff currently in place on all imported vehicles into the EU. This results in tariffs of up to 48.1 % for Chinese EV manufacturers.
Non-Chinese automakers that produce some EVs in China will also be affected. Tesla may be given an “individually calculated duty rate” due to a particular request it made, though.
According to reports in the media, Germany made a final push to the EC to keep the EV tariffs as low as possible on Tuesday to stop China from retaliating.  ,
After the EC’s Wednesday announcement, German Transport Minister Volker Wissing posted on X that” the EU Commission’s punitive tariffs affect German companies and their top products” . ,
German businesses expressed concern that the EU tariffs will have an impact on the country’s stark export-oriented economy.
Peisch, whose key responsibilities at USTR included coordinating with European partners on tariff action to address Chinese overcapacity, said it’s a significant challenge that Germany and its businesses oppose the EU’s new tariffs on Chinese EVs.  ,
” Many German businesses have invested heavily in China. And it’s understandable that they are concerned about the EU’s tariffs and what they might mean for their Chinese markets, she said. They” simply assume that China will engage in retaliatory behavior,” they say.
” But in my opinion, Germany and those companies are a little short-sighted because I believe China wants to dethrone those European sellers in its own market,” she continued. There are still a lot of money to be made in China by these German producers in the near future. But will they still be greeted there in a while?
Before China begins replacing German businesses with local players, she advised German businesses to make long-term plans for their development.  ,
Due to uncertainty over how China might respond to the EU’s new tariffs, European auto stocks fell on Wednesday and Thursday.  ,
China’s responses
Beijing vowed to take the necessary steps on Thursday in response to the EU’s decision to impose new tariffs on Chinese electric vehicles.
The China-based government will pay close attention to the European side’s progress and will resolutely take all necessary steps to resolutely defend the legitimate rights and interests of Chinese companies, according to the government’s official statement on Thursday.  ,
Lin Jian, a spokesperson for China’s foreign ministry, described the EU’s anti-subvention investigation as a typical example of protectionism that disregarded the facts and World Trade Organization regulations.  ,
We urge the EU to take into account the rational and objective viewpoints of various stakeholders, correct its mistaken choice at once, stop politicizing trade, properly address economic and trade frictions through dialogue and consultation, and prevent harming China and the EU’s mutual trust, dialogue, and cooperation, Lin said.
According to Sun Xiaohong, secretary-general of the automotive branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, China has a lot of countermeasures against the EC’s most recent action, which does not adhere to WTO principles.  ,
He said the EU’s move is unreasonable and not good for trade development. He claimed that Tesla’s temporary exemption from the temporary tariffs demonstrated that only Chinese businesses are targeted by the EU tariffs.  ,
He added, however, that China is still willing to engage in negotiations with the EU to prevent a full-fledged trade war.
Peisch said it’s unclear what allegations and arguments China might have if it sued the WTO for the EU’s tariff action.
” Just saying’ protectionism’ does not make it inconsistent with the WTO rules”, she said. They would need to determine how the EU had broken those rules specifically. And from the face of it, I do n’t know what that would be”.
Read: China to retaliate if Europe raises EV tariffs
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