China prepares for Europe’s brutal taxation of its electric cars

A European Commission plans to impose provisional taxes on electric vehicles manufactured in China from July 4th, according to information released to Chinese automakers by Chinese authorities. UE.

The measure comes as part of an investigation into subsidies for China’s electric vehicle industry, which has already generated tensions in the bilateral relationship.

Representatives from a Chinese automobile association were briefed at a meeting in Brussels on Monday about the imposition of the provisional duties, although the specific rate has not yet been disclosed.

The Commission was initially scheduled to announce the rates on June 5, but chose to postpone. After imposition in July, it will have four months to decide whether to continue the rights, in consultation with Member States.

“This is an ongoing investigation, we will not comment. We will be in a position to announce some provisional elements very soon”, he stated Olof GillEU trade spokesperson.

The European Commission’s decision has caused controversy, with intense debates between supporters of the tax, who include data security-conscious securocrats and economic nationalists, and opponents who argue that the tariffs distort markets and undermine the EU’s decarbonization efforts.

In Germany, powerful voices have been raised against the duties, given the impact on the costs of transporting Chinese-made vehicles to Europe. The Chancellor Olaf Scholz publicly expressed his doubts about the investigation.

As the European Parliament elections approach, speculation has emerged that the Commission could delay the release of rates to avoid influencing the election outcome.

In response, the Chinese Ministry of Foreign Affairsthrough the official Wang Lutongexpressed in X the provision of China in protecting the interests of their companies.

Analysts at Rhodium Group e do Institute Like to the World economy assess that rates lower than 50% would be insufficient to deter imports and protect the EU automotive industry.

Meanwhile, China is signaling possible retaliation, including tariffs on strategic European products such as pork and planes.

The current situation highlights the delicate balance between industrial protection and international trade relations, with the potential for escalation into a trade war tit-for-tat.

With information from SCMP