The U.S. insistence on imposing import tariffs on mainland electric vehicles despite China's strong opposition has been interpreted as injurious but extremely insulting.
Recently, the United States announced that it would increase tariffs on Chinese electric vehicles, lithium batteries, photovoltaic cells, critical minerals, semiconductors, steel and aluminum, port cranes, personal protective equipment and other products. Among them, the tariff on electric vehicles will be raised from 25% to 100%.
The U.S. announced a 100% tariff on Chinese electric vehicles, which looks crazy, but what the U.S. has done is just an empty punch
Raising the tax to 102.5 percent is a figure that sounds appalling in itself and illustrates the current level of madness in the United States. However, judging from the actual practical effect, the introduction of this measure will hardly have a substantive impact, that is, the tariff stick wielded by the United States looks like a tiger and a tiger, but there will hardly be any substantive consequences, why? Because the mainland exports almost no electric vehicles to the United States, it is equivalent to negligible.
According to the Atlantic Council, the mainland's total EV exports reached $34.1 billion in 2023, a year-on-year increase of 70%. Among them, the United States imported only 368 million US dollars of electric vehicles into China, accounting for 1.08% of China's total exports of electric vehicles. Whether the U.S. market exports to Chinese EV brands are negligible, it can also be said that there are almost no exports to the U.S. Then, no matter how much you raise taxes, it is meaningless.
The introduction of such a major measure was considered by the media to be an empty punch, because it had no impact on the mainland's electric vehicle industry at all. But is this really the case? In fact, Americans have a clear understanding of this, and the United States has not hesitated to release a number of policies to support new energy vehicles since March 2021, and Biden has announced a $2.3 trillion "package", including a "$174 billion" electric vehicle support plan, emphasizing the need for subsidies for "clean cars" in the United States.
In 2024, the U.S. government will issue new rules on EV subsidies, and Chinese battery makers and other NEV supply chain companies will be excluded from the Inflation Reduction Act tax credit.
The U.S. explanation for this is to protect the U.S. auto industry and create jobs for U.S. workers, but this sudden and unilateral drastic increase in tariffs not only seriously violates the rules of the World Trade Organization, but also destructively affects the global trading system.
Therefore, the U.S. tariffs on China's electric vehicles seem to be very limited, but they show the determination and confidence of the United States to protect the electric vehicle industry, and at the same time show the attitude of restricting and suppressing China's dominant electric vehicle industry. That's what matters.
The most terrible impact of the U.S. sanctions on the mainland's new energy industries such as electric vehicles is the policy drive for Europe, which will have serious consequences for the mainland's advantageous industries, but Europe does not seem to have been fooled
Although the mainland's exports of electric vehicles and new energy products to the United States are limited, why is the United States still insisting on going its own way? The fundamental goal is to completely stifle China's new energy advantage industries through policy influence in Europe.
The mainland's commerce department pointed out that China's new energy vehicle companies have won a broad market on a global scale by relying entirely on their own advantages, and the United States' reckless policy is an attempt to stifle the development of China's advantageous industries.
Because along with the trams, the mainland's lithium batteries, photovoltaic cells, minerals, heavy machinery and other advantageous products are also subject to tax increases. The tax rate on lithium batteries and steel and aluminum products has risen from 7.5% to 25%, the tax rate on "heavy equipment" such as minerals and port cranes has been changed from 0 to 25%, and the exchange rate for photovoltaic cells, semiconductors and medical supplies has doubled to 50%.
How many advantages do new energy vehicles have in mainland China? Let's start with the data reported in the news media:
In 2023, China's NEV production and sales will reach 9.587 million units and 9.495 million units, respectively, ranking first in the world for nine consecutive years, of which 1.203 million NEV exports will be exported, up 77.6% year-on-year. This sustained and rapid growth of automobile exports is where the pressure on Europe and the United States is very great. At the same time, the mainland's new energy vehicles are competitive to the traditional fields of Europe and the United States in terms of quality and the degree of expansion of factories built abroad. The BYD ATTO 3 car was voted the UK's best electric car of the year 2023 by News UK, and Geely's Geometry E model became the best value for money for Rwandan consumers.
More importantly, the continent's electric vehicles have formed a certain competitiveness in the traditional field of European automobiles, "SAIC Anji Shencheng" car ro-ro ship 5,000 Chinese own brand new cars, about half of which are new energy vehicles to Europe, one of Europe's largest car ports in Belgium Zeebrugge port dock parking lot Chinese cars have repeatedly entered the lens of European media, China's vehicles, three electric systems, automotive software and other fields of more than 50 Chinese automotive industry-related companies made a wonderful appearance at last year's Munich International Motor Show in GermanyOra Good Cat officially rolled off the assembly line at the Rayong New Energy Vehicle Manufacturing Base in Thailand, and Great Wall Motor's Oman distribution network was officially put into operation.
The ultimate goal of the United States is to pull Europe together to deal with the mainland's new energy advantageous industries, and at the same time stifle and restrict development, but can this goal be achieved?
It has been reported that the European Union will also follow the United States in imposing punitive tariffs on Chinese electric vehicles, which is the purpose of the US tax increase. However, in the EU, the German Federal Minister of Transport raised a resolute objection, and the chairman of the German BMW Group, Zipzer, made it clear that if the EU imposed additional tariffs on electric vehicles imported from China, it would only "shoot itself in the foot".
Sweden has spoken out against the US approach and said that Sweden does not want to disrupt global trade and that punitive tariffs are not a good idea but a stupid one for importing countries. The Swedish Prime Minister said that the United States will raise tariffs on Chinese electric vehicles will have a global impact and may have an impact on the global electric vehicle market. However, such protectionist measures are not conducive to the long-term development of the global economy, and all countries should resolve trade disputes through dialogue and cooperation to jointly maintain the stability of the multilateral trading system, because openness and cooperation are the key to promoting economic growth.
Germany, a traditional automotive powerhouse, has also spoken out against the U.S. approach, which it sees as hurtful, because more than 50 percent of Western brand cars are produced in China and then imported to the United States and other regions, which will affect the development of Western car companies. They do not recommend that the United States implement so-called tariff protection, because this will affect the development of the global economy.
More and more countries have realized that the United States is doing stupidly, and they believe that only an open trade policy can boost economic development.
How can the mainland counter the US tariff hike? In fact, the mainland's countermeasure toolbox has more policy tools
Some people, including U.S. politicians and domestic public opinion, may believe that the mainland has limited means of response, given that the United States is on the strong side in the competition with China. Yellen said that the competitiveness of Chinese goods is too strong and may destroy the emerging industries of the United States, and the United States will take a series of sanctions in the hope that China will not retaliate for this.
Mainland spokesman Wang Wenbin said in response to a query that "Biden will announce additional tariffs on Chinese goods such as electric vehicles", saying that China will take all necessary measures to safeguard its legitimate rights and interests.
But in fact, after several years of facing various US sanctions, the situation on the mainland has changed very much, and now it is becoming more and more favorable to us, and we will choose more and more policy tools that are more and more favorable.
First, the mainland will continue to sell US bonds, thereby increasing the pressure on US bonds. The U.S. debt is on the verge of crisis, and it is still continuing to swell to issue new debt to repay old debt, and continue to maintain the operation of the financial game of "tearing down the east wall and making up for the west wall". According to data from the U.S. Treasury Department, the mainland reduced its holdings of U.S. bonds by $7.6 billion in March this year, reducing its holdings to $767.4 billion, reducing the size of its holdings for three consecutive months.
Second, China has canceled US wheat orders on a large scale. Since March, Chinese wheat buyers have canceled US wheat orders on a large scale, and in addition to the bumper harvest of Russian wheat that has a price advantage over US wheat, the US countermeasures are also an important reason.
Third, the mainland and Russia and Saudi Arabia continue to promote the settlement of commodity transactions in RMB and local currency, and the stable exchange rate policy of the mainland and the exchange of RMB and local currency are effectively hedged. Recently, there are three major events that have attracted the attention of the world, but they have made Europe and the United States unhappy to explode, that is: the visit of a Russian luxury team to China to establish a comprehensive strategic cooperative partnership, and at the same time, the economic and trade between China and Russia will be settled in RMB; But why is Russia's luxury team missing the most important energy chief? It turned out to be in Saudi Arabia, and Saudi Arabia announced that it would use its own currency, especially RMB, to settle trade with China, which was big enough to subvert the international payment and settlement system in the future; The most important thing is that in the future, the Asian settlement system will be gradually formed and improved, including China, Russia, Saudi Arabia, Iran and even many neighboring countries.
The United States has raised taxes on China's electric vehicles, knowing that it is not very harmful, why does it still do it with great fanfare? Is it just to insult the mainland's traditional electric vehicle industry? What's the insidious meaning behind it? The fundamental purpose is to demonstrate Europe and the United States, lead public opinion, and stifle the mainland's advantageous industries. The United States wants to confront and stifle the mainland's future economic and scientific and technological development in an all-round way, and to continue the US dollar, science and technology, and military hegemony. However, although China's road to peaceful rise is not smooth, it will continue to move forward, which is an irreversible trend. What do you think is the impact of US sanctions on the mainland? (Qijian said Finance)