Will the EU delay its decision to tax Chinese EVs? China's response: urging the EU to terminate the countervailing investigation as soon as possible

Globe.com

2024-05-31 06:50Posted on the official account of Shaanxi Global Network

Reuters reported on May 29, citing sources familiar with the matter, that the European Union will postpone its decision on whether to impose tariffs on Chinese electric vehicles until after the European Parliament elections on June 9. The German weekly Der Spiegel, which was the first to report the news, said the reason for the delay was "to avoid involving the issue in a heated election campaign". Chinese Foreign Ministry spokesperson Mao Ning said at a regular press conference on May 30 that China urges the EU to terminate the investigation as soon as possible to avoid undermining China-EU economic and trade cooperation and the stability of industrial and supply chains.

The European Commission announced in October last year that it would launch a countervailing investigation into imported electric vehicles originating in China, which will take up to 13 months. The European Commission could impose a temporary countervailing duty nine months after the start of the investigation, which was reportedly planned to be announced on or before 5 June. Reuters, citing sources, said that the announcement date of the new temporary tariffs could be June 10, the day after the European Parliament elections. According to Der Spiegel, the tariffs are expected to take effect provisionally in early July and finally in early November after EU consultations with relevant manufacturers and member states. European Commission President Ursula von der Leyen believes that this deadline should be used to negotiate with China.

Data map: On February 26, 2024, in Bremerhaven, Germany, a new "Seal" model car from Chinese automaker BYD stopped in front of the BYD "Trailblazer 1" car cargo ship. (Visual China)

"The decision to postpone the announcement of tariffs reflects the European Commission's strategic approach to sensitive economic issues during the election period." By postponing the announcement, the European Commission aims to prevent tariffs from becoming a controversial issue, which could sway voters or divide public opinion, according to a Reuters analysis. The postponement also highlights the delicate balance in the EU's trade relationship with China. While the EU seeks to protect its internal industries from "unfair competition", it must also contend with the complexities of international trade diplomacy.

"Regarding the EU's launch of a countervailing investigation into China's electric vehicles, China has repeatedly stated its position." Mao Ning stressed again on May 30 that the essence of this anti-subsidy investigation is trade protectionism. There are many unreasonable and non-compliant practices in the EU's investigation, and the alleged so-called Chinese "subsidy" project is completely untenable.

Cui Hongjian, director of the Center for EU and Regional Development Studies at Beijing University of Foreign Chinese, said in an interview with the Global Times on May 30 that the EU does take political factors into account when making relevant decisions. Earlier they may have wanted to influence the election by announcing the preliminary verdict before the European Parliament elections. The EU wants to use this to curb the turn of the far-right forces within it, and at the same time to win support by telling the masses that the mainstream parties have something to do in the face of protectionism. Cui Hongjian said that in recent days, the German side has spoken intensively, hoping to take some measures on the issue of electric vehicles to avoid a trade war. Such statements may have had some impact on the EU's delay in publishing the results of the survey.

The European Commission's countervailing investigation into electric vehicles imported from China has not only aroused opposition from many European car companies such as BMW and Volkswagen, but also a number of German government officials have also stated that the tariffs are "wrong". Germany's Federal Minister of Digitalization and Transport Wiesing said in an interview with Eurodynamics on May 29 that trying to protect the European industry by raising taxes on Chinese electric vehicles is the "wrong way". He said global competition would incentivize German companies to produce better and cheaper cars. German Economy Minister Habeck warned the German newspaper Rheinische Post that once the EU imposes punitive tariffs on Chinese-made electric vehicles, it will cause damage to the German economy.

Cui Hongjian believes that at present, there are obvious differences within the EU on the issue of the investigation of China's electric vehicles, which are mainly divided into two factions: one group believes that through this investigation, the EU needs to cooperate with the United States to maintain its industrial and economic security; On the other hand, there is a more pragmatic view of the close industrial chain cooperation between China and the EU, especially between China and Germany, in green industries such as electric vehicles. If the United States blindly follows the United States in imposing high tariffs on Chinese products, it will cause major damage to Europe itself, forming a situation of "killing 1,000 enemies and losing 800 of itself." If the EU does delay the release of the preliminary results of its investigation into Chinese products, it reflects the fierce game that is taking place between the two factions.

The European edition of the American "Political News Network" reported that the Chinese side has expressed strong dissatisfaction with the European Union's successive and clamor for the continuous expansion of anti-subsidy investigations against Chinese companies. If Europe continues to act, China is likely to take a series of steps to retaliate. China has launched an anti-dumping investigation against European brandy, and some media speculate that European luxury cars and pork may be "retaliated against" next.

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