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At a meeting of automakers and representatives of the Ministry of Commerce, Chinese manufacturers expressed support for imposing additional taxes on large vehicles, the state-run Global Times reported on Wednesday. Industry insiders said this involves cars with a displacement of more than 2.5 liters.
Such vehicles are typically much more expensive for automakers than smaller cars. The purpose of the meeting was to put pressure on the European Commission and take action on Europe’s anti-dumping duties on Chinese cars, two people familiar with the matter said. One person familiar with the matter said China had made clear its serious lack of understanding of the import tariffs and demanded a strong response. All participants agreed that a trade conflict must be avoided.
Europeans take cautious steps
Representatives of European manufacturers BMW, Mercedes-Benz, Volkswagen, Porsche, Stellantis and Renault, as well as Chinese companies SAIC, Geely, BYD and Great Wall Motor attended the meeting, according to a person familiar with the matter. With the exception of Great Wall, all other Chinese automakers have publicly expressed support for higher tariffs. European manufacturers have rejected this and advocated a cautious approach.
According to industry sources, China and the European Commission aim to resolve the conflict. Bosch boss Stefan Hartung said the European Commission’s announcement that it would impose tariffs could spark negotiations between Brussels and Beijing to avoid the exact tariffs. The European Commission said it was studying whether a solution could be found.
China is important for many German companies
Germany’s Economy Minister Robert Habeck said before leaving for China that China is very important for many German companies as a production location, innovation center and procurement and sales market. “That is why it is important that we continue to talk and speak about fair and equal conditions of competition.”
Chinese electric car manufacturers are losing interest in Europe, according to a survey: One in five respondents to a Chinese Chamber of Commerce survey in April said the European Commission’s customs investigation had affected their trust. Nearly three quarters reported a decline in business due to the investigation. However, most see Europe as a strategically important market and plan to open plants in Europe within five years.
EU follows US move
The European Commission has announced special tariffs of up to 38.1% on electric vehicles imported from China. She justified this by citing the distortions of competition caused by high subsidies in the People’s Republic. The EU is thus following a similar move by the United States and quadrupling tariffs on Chinese electric vehicles to 100%. After the controversy over punitive tariffs on electric vehicles, the Beijing government warned of the possibility of a new trade conflict.
According to Eurostat, the EU exported cars to China worth 19.4 billion euros in 2023. Most of these are profitable large combustion engine models: According to Chinese import data, China has imported 1.2 billion dollars worth of cars with engines with a displacement of more than 2.5 liters from Germany since the beginning of this year alone. The total amount of car imports from the People’s Republic of China in 2023 was 9.7 billion euros. For German car manufacturers, China is the most important market, accounting for about a third of sales.
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