European tariffs on Chinese electric cars are a reality. From tomorrow (31 October) they will become operational and definitive. A move that risks hitting not only the auto sector (Audi announced the closure of the Brussels factory in February), but also the food sector. Beijing, in fact, in addition to reacting with “we do not agree and we do not accept it”, has already threatened repercussions on the trade of spirits, brandy, cheese and pork. A blow for the whole of Europe.
To curb Chinese imports facilitated (says Brussels) by Beijing’s massive government subsidies, here the duties officially kick in from 17% to 35.3% on models produced by giants such as BYD, Geely and SAIC. The new duties, definitive for the next five years, follow an EU investigation to combat dumping practices and unfair competition. According to the European Commission, the duties are justified by the extraordinary subsidies that Chinese companies receive to keep the prices of their electric cars competitive even in foreign markets, where they manage to sell below cost. The tariff plan, which varies from 17% to 35.3% depending on the companies, will particularly hit big Chinese brands and even Tesla, whose models assembled in Shanghai will be subject to a 7.8% tariff. Overall, the combined tax will reach 45.3%, creating a new entry barrier for Chinese e-cars.
Duties which, according to some Member States (such as Germany), would not help European car production to regain the competitiveness lost compared to that of China and to regain lost ground. A sector that has been in crisis for some timewith Audi confirming the closure of its Brussels plant for February 2025, a move affecting 3,000 workers. And with the Volkswagen group reporting that third-quarter operating profit fell by 41.7%.
But it’s not just the auto sector that’s at risk. There’s everything else. In response to the European Union’s tariff policy, China has indeed threatened large-scale measures in the European agri-food sector. Spirits, including brandy and the famous French cognac, are already at the center of Beijing’s attention, which has imposed additional tariffs of between 30.6% and 39%. China represents a vital market for these exports: sales of French cognac to the Chinese market, in fact, are worth 1.7 billion euros per year, while the export of wine and spirits risks further restrictions. However, the Chinese government is not stopping at spirits: cheese, pork and dairy products, crucial for European exports, could soon end up under the ax of new tariffs. The EU, in fact, exports milk and dairy products worth over 1.76 billion euros a year to China, while pork represents a significant share of exports to Beijing, with a total of around 1.5 billion in 2023 for Spain alone.
And another front is also opening up in the EU-China trade war. The tomato sector complains of unfair competition from Chinese purée producers and the fear is of an “invasion” of low-priced products in Europe. Thus the request for European duties also in this sector. A sector that produces 5.4 million tonnes per year and represents over 12% of world production. And so the Italian producers, through the voice of Francesco Mutti (CEO of the group and vice-president of Anicav) have requested that Chinese preserves be subject to a 60% tax to compensate for the environmental and social costs that instead weigh on European companies.
The EU and China are preparing for a possible confrontation at the World Trade Organization (WTO) but in the meantime the trade tension risks expanding rapidly, involving several crucial sectors.
