EU Decision to Increase Tariffs on Chinese Electric Vehicles

The European Union (EU) has decided to increase anti-subsidy tariffs on Chinese electric vehicles by up to 38%. This is a countermeasure to the Chinese government's support for the electric vehicle industry, aimed at protecting European electric vehicle manufacturers.

The main points are as follows:

• Tariffs of 17.4% on BYD, 20% on Geely, and 38.1% on SAIC
• Tariffs of 21% for Chinese companies that cooperated with the investigation, and 38.1% for those that did not.
• Temporary tariffs in addition to the existing 10% import tariff
• Temporary tariffs will be applied from July 4th, and final tariffs will be confirmed from November.

China's Rebuttal and Threat of Retaliation

The Chinese government strongly protested the EU's decision, calling it "naked protectionism." Foreign Ministry Spokesperson Lin Jian warned that "China will take all necessary measures to safeguard its legitimate rights and interests."

In particular, Chinese media outlets are mentioning the possibility of retaliatory tariffs on EU agricultural products, especially dairy and pork industries. They have already initiated an anti-dumping investigation on EU brandy imports in January.

Concerns for European Dairy and Pork Industries

The European dairy and pork production industries are expressing concern over China's retaliatory tariffs.

• China is the second largest export market for EU dairy products, accounting for 36% of EU dairy exports in 2023.
• Major dairy producing countries such as the Netherlands, France, Germany, Ireland, and Denmark have a high dependence on the Chinese market.
• China is the world's third largest importer of pork, after Spain, Brazil, and the United States. [5]

The European dairy and pork industries are expected to suffer a major blow if they lose the Chinese market.

Opposition from Some Member States Like Germany

Some EU member states, including Germany, Hungary, and Sweden, are opposing the tariff increase.

• German Transport Minister Volker Wissing criticized the move, stating that "This will hurt German companies and key products."
• Hungary is preparing to build a factory for the Chinese company BYD, and Geely's subsidiary Volvo is a Swedish company.
• Hildegard Müller, president of the German Association of the Automotive Industry, argued that "Improvements to the European manufacturing environment are necessary, rather than tariffs."

Future Outlook and Implications

Some experts believe that a full-blown trade war between the EU and China is unlikely. [2][8] However, there are concerns about escalating conflict due to mutual retaliatory tariffs.

This incident is exposing the conflict between pro-China and anti-China factions within the EU. It is also highlighting the clash of interests among EU member states over the future of the European automotive industry.

Ultimately, the European agricultural and food export industry is likely to suffer a major setback. The dairy and pork industries, which have a high dependence on the Chinese market, are expected to bear the brunt of the impact.