Europe is divided over tariffs on Chinese cars

The European Commission's decision to impose heavier duties on Chinese cars may seem like a correct and even courageous choice. In reality it reflects all the weaknesses of an industrial system deeply linked to the Chinese one. After the Commission's investigation into Chinese electric vehicles provisionally concluded that they “they benefit from unfair subsidies”and which “are causing a threat of economic damage to EU producers”, the European authorities have imposed additional duties on Chinese cars which vary depending on the manufacturer: on Byd cars they will be 17.4%, Geely 20%, Saic 38 ,1%. Other producers who cooperated in the investigation will be subject to an additional duty of 21%, while it will be 38.1% for those who did not cooperate. These duties are added to the current European tariffs on Chinese cars, equal to 10%: so for SAIC, owner of the MG brand, the overall duties will be 48.1%.

The increase in tariffs seems notable, but in reality it is not: the United States has decided to impose much higher countervailing duties, equal to 102.5%, while according to the research company Rhodium, to eliminate the enormous competitive advantage accumulated in In recent years, tariffs from Chinese houses should reach at least 50%.

For now, the penetration of Chinese brands on the European electric car market is apparently not high: last year they captured 8% of electric vehicle registrations and the environmental organization Transport & Environment predicts that they could reach 11%. % in 2024 and 20% in 2027. But to these numbers must be added the many cars branded with European and American brands and built in China, such as the Tesla Model 3, manufactured in the Shanghai gigafactory, the Smart made by the joint venture between Daimler and Geely, the Dacia spring, the BMW Mini Cooper, the Cupra Tavascan. Taking these models into account, the market share in Europe of electric cars produced in China is close to 20%.

And it is precisely by looking at these data that we understand how difficult it is for Europe to impose high duties: it must protect European companies that produce in China, surgically targeting some companies and not others. Above all, saving the Germans, who are strongly present on the Chinese market. It is no coincidence that Europe was divided in the face of the Commission's decision, with Berlin opposing it and asking to offer China a discussion table, while the Italian government applauded (and meanwhile courted Chinese companies to come and produce here ).

Germany's fear is of triggering a trade war with China and of seeing Beijing impose new tariffs on German cars. For Volkswagen, China is extremely important: it represents its largest single market. In recent years, a significant portion of its total turnover has been generated in China where the group controls 14.5% of the market. Around 40% of its global sales are made in the Asian country. Volkswagen has invested heavily in the Chinese market, establishing numerous joint ventures with local companies to produce and sell vehicles there.

Even for BMW, China is crucial, it represents the single most important market. In the recent past, around a quarter of the cars sold by the Munich-based company worldwide were purchased by Chinese customers. BMW has responded to this great demand by strengthening local production through joint ventures such as the one with Brilliance Auto. This not only allowed BMW to expand its presence in the Chinese market, but also facilitated the adaptation of its models to the specific preferences and needs of Chinese consumers, including a strong interest in electric and hybrid vehicles.

Stellantis has also linked itself to China, having announced an agreement to import into Europe some cars produced by Leapmotor of which the Franco-Italian group is a shareholder: from September the vehicles of the Hangzhou company will begin to be distributed and sold on our continent. But now their price can no longer be as competitive as hoped by Stellantis managers. ALL ECONOMY NEWS