Ursula Van der Leyen, the President of the European Commission, announced on September 13, 2023, during her State of the Union speech, that she was launching an investigation into Chinese subsidies for electric cars sold in Europe. A decision welcomed by France which intends to protect its automobile industry.
France is seeking to use all its weight to ensure that the European Commission takes measures to protect its industry. The day the President of the European Commission made her announcement, Bruno Le Maire, the Minister of the Economy, was in Berlin so that France and Germany could take joint action in this direction.
The objective is to no longer open the door wide to Chinese electric vehicles which are flooding the European market, even though the Chinese government supports them massively with subsidies, which allows its manufacturers to slash prices. But the irony is that France also subsidizes these models made in China. 40% of electric vehicles whose purchase the State supports, via the ecological bonus, are actually manufactured in China. The government wants to prevent the French, and more broadly European, taxpayer from financing cars produced in Shanghai or Shenzhen, China.
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In a way, Europe is becoming protectionist. No more naive free trade. To limit Asian imports, France wants Europe to apply customs duties reciprocally, that is to say at the same level, between China and Europe, which is not the case.
Paris also wants to act on the consumer side by better targeting assistance for the purchase of electric cars, in particular the ecological bonus. For the next budget, Bercy plans to reserve this bonus for cars that meet a certain number of environmental standards. Without saying it, the French government calibrates this bonus precisely to exclude cars “made in China”.
… but reluctance from Germany
Retaliatory measures are also possible, but there is a risk of economic war with China. This is the great fear of Germany, whose economic model is based, in large part, on car exports, particularly to Asia. This is why the Germans are reluctant. But for France, it is urgent to show China that we are playing the balance of power, that we are fighting on equal terms.
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