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The European Union is waging a trade war with China that is expected to shake up the global auto market. After a year-long investigation, the European Commission announced that it would provide huge subsidies for Chinese cars exported to Europe, especially electric cars and electric vehicles, making their prices significantly lower compared to European manufacturers and Chinese companies.
Tariff rates will not be uniform and will change according to the alliance’s word, depending on the subsidy rates received by each manufacturer. SAIC, which sells the MG and Maxus brands in Europe and Israel, will be charged the highest rate, 38.1%. Geely, which sells Wey and Ora in Europe, as well as Volvo and Polestar, which it owns and also sells Geometry C in Israel, will be charged 20%, while BYD will be charged 17.1%. Other manufacturers that cooperate with the EU investigation will be charged a 21% tariff, while those that do not will be charged 38.1%.
Cars produced in China by European manufacturers and exported from China to the African continent will also be subject to tariffs, such as the BMW iX3, Dacia Spring and Volvo EX30. Tesla, which produces Model 3 cars in China for sale in Europe, will then enjoy its own tariff rate, and the new tariff rate will be added to the 10% already imposed by the EU, the EU announcement said. EU countries use Chinese-made cars.
The companies have a few days to submit their responses, and the increased tariffs will be imposed starting July 5.
In recent years, sales of Chinese-made cars in Europe have increased significantly, jumping from 209,000 in 2021 to 300,000 in 2022 and reaching 440,000 in 2023. The EU is worried that after the infiltration of cheap collectors from China in the past decade, its small response will lead to the reconstruction of the local solar collector industry’s collapse, while the automotive industry and its suppliers are one of the largest employers in Europe, especially in major countries such as Germany and France.
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