The European Commission is considering imposing retroactive tariffs on Chinese car companies for the subsidies they receive from the Chinese government. This is stated by the Commission in an implementing regulation dated Tuesday, in which it ensures that there is “sufficient evidence that imports” of electric passenger vehicles from China receive aid of different types. Either by “the direct transfer of funds” or “the forgiveness or non-collection of public revenue” or “the public provision of goods or services for less than adequate remuneration,” according to the document. For this reason, Brussels has ordered customs authorities to register imports of Chinese electric cars over the next nine months (only passenger vehicles with up to a maximum of nine seats. Motorcycles are excluded).
This document is the result of the investigation that Brussels is carrying out to discern whether Chinese car companies receive illegal subsidies from the Chinese State. The Commission's objective is to protect the interests of European car manufacturers against the Chinese, which have landed en masse in Europe in recent years with a varied range of electric vehicles and with which in many cases Europeans cannot compete in quality and price. The Commission has found that imports of Chinese electric vehicles increased by 14% year-on-year between October 2023 (when the subsidy investigation was formally opened) and last January.
“There is a risk that an increasing number of Union producers will be affected by declining sales volumes and reduced production levels if the level of imports at supposedly subsidized prices from China remains as it is after the initiation of the investigation,” explained the Commission, which sees that this “will have a negative impact on employment and the general performance of Union producers.”
The European Commission had begun this investigation after numerous complaints from some of the main manufacturers of the Old Continent, who saw themselves at a disadvantage compared to the manufacturers of the Asian giant. “We should ask the European Union to impose the same conditions on Chinese manufacturers as we, Western companies, have in China. There is no reason why we make it easier for the Chinese manufacturer in Europe than what we face when we enter their market,” said the CEO of Stellantis already in 2022, during the Paris Motor Show ( the largest car manufacturer in Spain), Carlos Tavares. Curiously, Stellantis announced last year the purchase of 20% of the Chinese company Leapmotor in exchange for 1.5 billion euros. The agreement contemplates the sale of cars from the Asian brand outside of China.
“We have to find out if there is fair competition. I want to play 11 against 11 football and not 11 against 15. You have to look at that. “Europe has mechanisms to favor manufacturers that are environmentally positive for the planet,” Josep Maria Recasens, director of strategy and business development of the Renault group, had pointed out in an interview with Five days in October.
“Our companies are too often excluded from foreign markets or are victims of predatory practices. “They are frequently weakened by competitors that benefit from large state subsidies,” the president of the European Commission, Ursula Von der Leyen, had assured last September when she announced the investigation against Chinese subsidies.
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