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BEIJING: Chinese carmakers have urged Beijing to raise tariffs on imported European petrol-powered cars in retaliation for Brussels’ restrictions on Chinese electric vehicle exports, state media Global Times reported on Wednesday.
The report said that at a closed-door meeting on Tuesday also attended by European car companies, China’s auto industry “called on the government to take firm countermeasures and suggested actively considering raising the tentative tariffs on large-displacement gasoline vehicles.”
The meeting, organized by China’s Ministry of Commerce and held in Beijing, was attended by SAIC Motor, BYD, BMW, Volkswagen and Porsche, two people familiar with the matter said.
They added that the main purpose of the meeting was to put pressure on Europe and lobby against tariffs.
EU trade policy is becoming increasingly protectionist amid concerns that China’s production-focused, debt-driven development model could flood the 27-nation bloc with cheap goods, including electric cars, while Chinese companies look to boost overseas sales amid weak domestic demand.
Following the United States’ increase in tariffs on Chinese cars in May, the European Commission announced on June 12 that it would impose anti-subsidy duties of up to 38.1% on electric vehicles imported from China from July, opening a new front in the West’s trade war with Beijing.
The Global Times first reported late last month that a Chinese government-affiliated auto research center had recommended that China raise import tariffs on gasoline sedans and sport utility vehicles with a displacement of more than 2.5 liters to 25% from the current 15%.
Chinese authorities have previously hinted at possible retaliatory measures through state media commentary and interviews with industry insiders.
The newspaper also hinted last month that Chinese companies planned to ask authorities to launch an anti-dumping investigation into European pork products, which China’s Ministry of Commerce announced on Monday it would launch.
It also urged Beijing to investigate EU dairy imports.
According to the European Union’s statistics agency, the EU’s car exports to China were worth 19.4 billion euros ($20.8 billion) in 2023, while the EU purchased 9.7 billion euros worth of electric vehicles from China.
China accounts for about 30 percent of German automakers’ sales, and Chinese customs data show Germany is by far the largest exporter of cars with a displacement of 2.5 liters or more, having shipped $1.2 billion worth of vehicles to China since the beginning of the year.
Slovakia is China’s fourth-largest supplier of large-engine vehicles and the EU’s second-largest supplier, exporting $803 million worth of sport utility vehicles this year.
The United States, Britain and Japan also all export large numbers of cars with engines larger than 2.5 liters, so they are likely to benefit most from the proposed tariff increase. —Reuters
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