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%.
The current 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 head of trade, told Politico earlier this month that the investigation is “progressing.”
Last week, President Joe Biden announced new tariffs on a host of Chinese-made products, with tariffs on EVs from companies like BYD (BYDDY), Geely Automobile (GELYF), and NIO (NIO) set to quadruple from 25% to 100% of the vehicle's cost.
Earlier on Wednesday, the Office of the United States Trade Representative posted a notice stating that a 30-day public comment period on the tariffs would begin on May 29 and end on June 28. The tariffs themselves on electric vehicles and other items could begin as early as August 1.
Although sales of Chinese-made EVs in the US are quite small compared to other products, the imposition of tariffs is an escalation of the “US-China Cold War” and will naturally lead to China tightening sanctions against both the US and the US. There is a fear. 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.
Chinese buyers bought 3.09 million luxury cars from European automakers in 2022, according to automotive data firm Motor Intelligence. This is a 6% increase from the previous year. Motor Intelligence predicts that China's luxury car market will reach $154.7 billion in 2024, then grow to $181.5 billion by 2029.
Interestingly, some brands like Audi, which has a large presence in China, are increasingly collaborating with local brands to tap into 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 more Instagram.
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