Europe does not rule out the idea of ​​taxing imported Chinese electric cars more

During her traditional annual State of the Union speech on Wednesday September 13, Ursula Von der Leyen announced the opening of an investigation into public subsidies granted by the Chinese state to its electric car manufacturers. These subsidies are considered anti-competitive, allowing local groups to flood the global, and therefore European, market at artificially low prices.

Thierry Breton, the Commissioner responsible for the Internal Market, stepped up to the plate. According to him, this investigation could indeed lead to a significant increase in customs duties on imported Chinese cars. However, he cautiously tempered with: “We will see”.

The choice between protectionism and trade war

Currently, Chinese electric cars imported into Europe are subject to a 10% tax. Brussels could take inspiration from what the United States is doing, which imposes an additional tax of 28% on imports of Chinese cars into American soil, which is much more prohibitive.

>> Electric cars: the trade war between Europe and China

Experts estimate that the manufacturing costs of electric vehicles produced in China are 20% lower than what is practiced in Europe. In addition, Chinese manufacturers have taken a head start in battery technology. With the significant economies of scale achieved in the manufacturing of their cars, Chinese manufacturers are relying on their immense domestic market to develop abroad… In Europe first and foremost.

This is what Brussels wants to limit. But will the Chinese let this happen? Beijing warns against what it calls “the negative impact” of the European initiative. The Chinese talk about a measure “openly protectionist”. Could this be an implication to say that if Europe carries out its threats, the trade war is not far away? Beijing does not need to say more for now.