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EU launches countervailing duty investigation: China's electric vehicle industry faces challenges
According to Agence France-Presse and Reuters, the European Union officially launched a countervailing duty investigation into Chinese electric vehicles on October 4. The EU said it had "sufficient evidence" that China's electric vehicle subsidies could be damaging to European industry and planned to complete its investigation within 13 months. The inquiry will give the EU the right to impose temporary countervailing duties on Chinese electric vehicles for up to nine months, and if the findings are confirmed, the EU will also consider imposing tariffs of 10% to 27% on Chinese electric vehicles.
What's interesting about this investigation is that it was conducted without receiving written complaints from the EU auto industry, raising fears of a possible trade war. European Commission President Ursula von der Leyen, considered one of the main promoters of the investigation, appears to be aiming to make another "new contribution" for the United States before the end of her term next year. Once the China-EU trade war breaks out, the biggest beneficiaries are obvious.
However, this action did not come suddenly. As early as September 13, von der Leyen mentioned Chinese electric vehicles in his "State of the Union Address" delivered by the European Parliament, saying that he would launch a countervailing duty investigation against them, and this plan has been brewing under the surface for months. The EU Commissioner for the Internal Market, Breton, is specifically responsible for this, indicating that France is behind the plan.
Not only that, Chinese Ambassador to France Lu Shaye reminded the EU when attending the "Bahiri Mid-Autumn Festival Dinner" in Paris on September 14 that launching a countervailing duty investigation into China's electric vehicles is a protectionist act and will harm European consumers, calling on European countries to treat it carefully. China's Ministry of Commerce also issued a warning, expressing high concern and strong dissatisfaction with the EU's actions, noting that this will have a negative impact on China-EU economic and trade relations.
The German government and business community also oppose the EU's approach, arguing that if China takes retaliatory measures, the German automotive industry will be a victim. Although China and the EU reached a number of consensuses at the 10th China-EU Economic and Trade High-level Dialogue on September 25, there was no consensus on the so-called "anti-subsidy survey of electric vehicles".
There are divisions within Europe over whether to formally launch an investigation into China, but the arrival of U.S. Trade Representative Dai Qi seems to have encouraged von der Leyen and meant that the United States sided with France in an attempt to weaken Germany's influence within the European Union.
The development of this event has raised concerns about the Sino-European trade war, and von der Leyen does not seem to be planning to back down. France and Germany also have their own strategies, and France hopes to support the development of its local electric vehicle industry by restricting Chinese electric vehicles from entering the European market. Germany fears its auto industry will fall victim to the trade war.
The dispute will spark broader discussions about free trade and free markets, as well as about the future of the international economic system. China needs to maintain a firm stance to ensure the development and interests of its own industry. In the process, the complex interaction of international politics and trade will continue to shape the global economic landscape.
Source: Housha moonlight
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