The EU should reconsider imposing additional tariffs on electric cars made in China, as Europe does not need another trade war with China, said Spanish Prime Minister Pedro Sánchez during his visit to China.
This fall, the European Commission plans to impose tariffs on electric vehicles made in China: for SAIC Motor Corp., the parent company of Volvo Car AB Geely and BYD Co. – 36.3%, 19.3% and 17%, respectively. The new tariffs will be on top of the existing 10% tariff already imposed on exporters from China, including Western companies. For example, Tesla will face an additional rate of about 8%. Brussels accuses Chinese authorities of subsidizing the production of electric vehicles, putting European manufacturers in an unequal competitive position.
“I must be frank and direct with you that all of us, not only the Member States but also the European Commission, must reconsider our position in relation to this plan.” – said the Prime Minister of Spain to journalists in Kunshan, China Pedro Sanchez.
“We don’t need another war, in this case a trade war,” he continued. “I think we need to build bridges between the European Union and China, and on the Spanish side we will act constructively and try to find a solution, a compromise between China and the European Commission.”
As Bloomberg notes, the Spanish prime minister’s statement suggests that EU leaders may try to rally enough support to block the introduction of strict restrictions on the import of electric vehicles from China.
“Such a move would represent a sharp turnaround for EU trade chiefs in Brussels and their supporters, such as French President Emmanuel Macron, who are calling for urgent measures to prevent European manufacturers from being squeezed by competition from China, which subsidizes the production of electric vehicles.” – the agency writes.
If a supermajority of member states (15 countries representing at least 65% of the EU population) do not block the measures in a binding vote, the European Commission will publish a final regulation on tariffs by 30 October, he added.
Spain is one of the countries that could be most affected by a potential trade war. On the one hand, the country is the largest exporter of pork in Europe. In addition, Spain is the second largest car manufacturer in the European Union. And Madrid wants to attract Chinese investment for the development of electric vehicle production in the country, which was one of the reasons for Pedro Sánchez’s visit to China.
A similar strategy is already being used in Hungary, where Chinese companies are implementing several large electric vehicle projects.
