The European Union will hold its first round of vote on July 15 on imposing temporary tariffs on Chinese electric vehicles, and Germany was revealed to abstain from voting

Observer.com

2024-07-13 09:24Posted on the official account of Shanghai Observer.com

On July 15, local time, EU member states will vote on the plan to impose temporary tariffs on Chinese electric vehicles. On July 12, local time, Reuters reported citing sources that Germany would abstain. The report described the vote as "the first test of a landmark trade case for the EU".

According to the report, the first vote of EU member states is conducted in writing and confidentially, and is not binding. In the interim phase, the European Commission has full authority to impose tariffs, although it will consult EU member states and should take into account their positions. The European Commission will then hold a final vote at the end of the investigation, at which point it can propose a final tariff, usually valid for five years.

According to the report, Germany chose to abstain in the first phase of the vote, which actually means that Germany supports the European Commission to continue negotiations with China on the EU's largest trade case to date.

In September 2023, China's electric vehicles were unveiled at the 2023 Munich Motor Show, and the booth was packed with people. Visual China

Sources who requested anonymity said Germany, the EU's largest economy, was prepared to abstain because the countervailing investigations were ongoing and negotiations between the European Commission and China were underway. One of the sources said Germany would abstain from voting in a spirit of "critical solidarity" with the European Commission.

Later on July 12, local time, when asked about abstention, Germany Chancellor Scholz refused to confirm how Germany would vote, saying that Germany expects the European Commission to successfully reach an agreement with China on electric vehicles, which will benefit the European automotive industry.

"These are globally competitive cars, and there's nothing to worry about in competition." Scholz told reporters after meeting with Japan Prime Minister Fumio Kishida that day: "But we must always ensure that the conditions are fair on all fronts." Previously, Scholz was also revealed to have put forward an "extraordinary proposal" to persuade the EU to cancel the tax hike on China. He proposed that China and the EU impose equally high tariffs on each other's car imports, which is rumored to be 15 percent under discussion, but the numbers could still change.

On July 4, local time, the European Commission issued a 208-page document, which announced that it had decided to impose temporary countervailing duties on electric vehicles imported from China from July 5 for a maximum period of 4 months. During this period, EU member states will vote on the final countervailing measures, and if approved, the EU will formally impose countervailing duties on Chinese electric vehicles for a period of 5 years.

According to the latest announcement document of the European Commission, BYD, Geely Automobile and SAIC will be subject to temporary countervailing duties of 17.4%, 19.9% and 37.6% respectively, which is almost the same as the tax rate disclosed by the European side in the preliminary ruling on June 12, Geely Automobile and SAIC Motor Group only slightly decreased (20% and 38.1%), and BYD remained unchanged. According to the EU, this was an adjustment made after taking into account the comments submitted by interested parties on the accuracy of the calculations.

In addition, according to the European Commission's announcement, other Chinese automakers that have partnered but not sampled will be subject to a weighted average tariff of 20.8%, while those who do not cooperate will be taxed at 37.6%, compared with 21% and 38.1% respectively.

In this regard, China has made it clear that it will take all necessary measures to safeguard its legitimate and lawful rights and interests. In recent times, some automakers and EU member states, including Germany, have been pushing for negotiations between China and the EU.

On December 25, 2023, in Ganzhou City, Jiangxi Province, workers weld and assemble Dongfang IC, a new energy electric vehicle exported to South America, on a stamping and welding production line

Reuters pointed out that last year, a third of the sales of Germany automakers came from China, and they opposed the European Union's tariffs on China and feared that China would launch countermeasures that would lead to a trade conflict with China.

By contrast, France is one of the EU's strongest supporters of the trade bill, Hungary condemns it, and other EU member states are hesitant about how to vote. According to the report, this is the first formal test of the European Commission's support for tariff initiatives, and the EU has launched an investigation without industry complaints, the first of its kind in a trade case.

Reuters stressed that the EU imposes temporary tariffs of up to 37.6% on EVs imported from China, which does not require the support of member states, but if the majority of the EU's 27 member states oppose, the imposition of final tariffs could be blocked.

According to EU rules, at least 15 of the 27 member states, representing 65% of the EU's population, need a negative vote to block the decision. Judging from the current EU acceptance camp of electric vehicles in China, it may be difficult to cancel the tax increase.

On the evening of June 22, China's Ministry of Commerce announced that China and the EU agreed to start consultations on the EU's anti-subsidy investigation of electric vehicles against China. Reuters, citing Chinese media reports, revealed that after the start of the consultations, China wants the EU to lift tariffs on Chinese electric vehicles. The report pointed out that the EU's growing protectionist measures will trigger China's countermeasures, and the escalation of trade frictions will only lead to a "lose-lose" situation for both sides.

Regarding the EU's announcement that it will impose tariffs, Chinese Foreign Ministry spokesman Lin Jian previously said that the countervailing investigation is a typical protectionism. The EU's imposition of tariffs on electric vehicles imported from China on this ground violates the principles of market economy and international trade rules, undermines China-EU economic and trade cooperation and the stability of the global automobile production and supply chain, and ultimately harms Europe's own interests.

Lin Jian said, we have noticed that recently, politicians and industry representatives from many European countries have expressed opposition to the European Commission's investigation, believing that trying to protect the European industry by raising taxes on Chinese electric vehicles is the wrong way. Protectionism has no future, and openness and cooperation are the right way. We urge the EU to abide by its commitment to support free trade and oppose protectionism, and work with China to safeguard the overall situation of China-EU economic and trade cooperation. China will take all necessary measures to firmly safeguard its legitimate rights and interests.

This article is an exclusive manuscript of Observer.com and may not be reproduced without authorization.

View original image 448K

• 

•