The panicked reaction of the EU imposing punitive tariffs on electric cars from China.

  "By imposing punitive tariffs on electric cars from China, Brussels is negligently risking a trade conflict. This is damaging to German car manufacturers. They need completely different things in the current difficult situation.

 

     Panic is never a good guide. But this is exactly what is obviously driving the EU Commission to demand punitive tariffs on Chinese electric cars. The Chinese are currently conquering the European market with price advantages of 20 percent - from zero to soon 15 percent in five years. This is only possible because of billions in state aid, and European manufacturers can no longer keep up. Brussels is convinced of this. The solar industry sends its regards.

 

     So there seems to be no way around it, building up the walls to prevent the worst. The others do it too: Americans, Indians, Turks, they all impose protective tariffs on electric cars from China. To the outside world, the Commission is selling the tariffs as a pure defense against Beijing's unfair subsidy practices. This is intended to give the impression that everything is being done correctly, i.e. that it complies with the rules of the World Trade Organization (WTO).

 

     In fact, the Commission is walking on thin ice. She doesn't have a strong "case". There is no evidence of dumping, otherwise it would not have chosen the crutch of the anti-subsidy procedure. 

 

As the economist Gabriel Felbermayr aptly puts it, the EU sits in a glass house. After all, it has long since opened the state purse and is supporting the industry wherever possible - from battery production to purchase bonuses for electric cars. In addition, the Chinese's success may also be explained by the fact that they build better electric cars because - after Tesla's success - they backed this horse faster than the EU.

 

     The EU cannot be naive when it comes to China. But provoking a trade conflict on this basis is negligent. This will particularly affect German industry, including car manufacturers, who rely on open markets and access to the Chinese market. 

 

The answer to the difficult situation not only in the automotive industry lies not in protectionism, but in strengthening the EU as a location through less bureaucracy and more competition - and trade that is as open as possible with the rest of the world, including and especially with China." [1]

 

1. Die panische Reaktion der EU. Frankfurter Allgemeine Zeitung (online)Frankfurter Allgemeine Zeitung GmbH. Sep 14, 2023. Von Hendrik Kafsack, Brüssel