“Tariff” refers to a tax or duty that is placed on goods that are imported into or exported from a country. This is a tax that can be assessed based on various variables, such as the value of the good, its quantity, its weight or other specific characteristics. There are rumors of the possibility of raise i duties on cars imported from China with the aim of protecting the European automotive industry by leveling the prices of highly competitive Chinese cars.
Even the same Elon Musk he is worried about the competitiveness of Chinese car prices: a few months ago he declared that “We must take note that today Chinese manufacturers are among the most competitive in the world And without tariffs on cars, China will demolish competition“.
Duties on Chinese cars, including electric ones
For this reason, starting from March 7, 2024the European Commission will start the customs registration of imports of all cars from China following the publication of the “implementation regulation” in the Official Journal. This initiative is not only bureaucratic, but closely linked to the investigation anti-dumping previously announced by the EU Commission which brought illicit matters under scrutiny subsidies of Chinese government to car manufacturers in violation of competition rules.
To this end, various initiatives have been launched, including inspections at the headquarters in China of companies such as BYD, Geely and Saic. If all this is confirmed, it could lead to the imposition of import dutieswith retroactive effect from the date of publication of the regulation.
Currently, cars made in China and sold in Europe are subject to a tax of 10%. However, there are initial reports suggesting an increase in this tax to 27.5%, which would equate Europe to the United States in terms of tariffs applied.
Duties since when?
Although the investigation will end in November, the European Commission has decided to raise the duties as early as July. In this case, theretroactive application: the payment period would not start from July, but from the start of customs registrations, i.e. from March 7, 2024the day following the publication of the relevant regulation in the Official Journal.
Between October 2023 and January 2024 they were imported into Europe 177,839 Chinese electric carsan increase of 11% compared to the previous monthly average and 14% compared to the previous four months.
How the Chinese respond to tariffs
Chinese producers, as part of their expansion strategy in Europe, have already considered the possibility of tariffs, so much so that they have organized themselves to move their production to the Old Continent. For example, BYD has started construction of a site in Hungarywhich will start producing the first vehicles in 2026. SAICwith MGwill transfer production to the English factory in Longbridgewhere MG vehicles for the European market are already designed and designed.
There Leapmotor instead it signed an agreement with Stellantis to produce and sell cars in Europe, and indeed the rumors indicating the Mirafiori as a possible site for the production of some low-cost Leapmotor electric models.
Late choice
The Chinese phenomenon has therefore already widely exploded and the tariff policy appears late, especially considering the European Commission's decision to ban the sale of vehicles with internal combustion engines from 2035, without fully evaluating the economic consequences. This leads Europe to give up a technology in which it was a leader, while the Chinese have a significant advantage. The current actions seem overdue and much will depend on new European Parliament which will be formed after June 9, 2024.
Depending on the outcome of the elections, the new Commission could review the Fit for 55which from 2035 bans the production of vehicles with internal combustion engines, also because some manufacturers are reviewing their energy transition policies, suggesting the rehabilitation of other technologies such ashybridL'hydrogenThe e-fuels hey biofuels.
Problems with the export of cars produced in Europe to China?
Could this increase in duties have any consequences on the export of cars produced in Europe to China? Approximately 5 million European cars, with Volkswagen, BMW and Mercedes among the main European manufacturers. It is also true that Europe cannot ignore China at the moment, especially when it comes to rare earths and raw materials, and that it will have to deal with it: the presence of the Dragon can no longer be avoided, but only managed.
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