The European automobile employers’ association warns of the repercussions that the increase in trade tensions with China and the United States could have for the competitiveness of the sector. The CEO of Mercedes-Benz and president of the European Automobile Manufacturers Association (ACEA), Ola Källenius, has asked the European Union avoid a trade war with Beijing over electric vehicles, in relation to the tariffs of up to 35.3% on these imports from the Asian giant approved by Brussels last October.
“It is understandable that the EU must protect its internal market and its economy against actors who do not respect the rules of the World Trade Organization (WTO). But experience also has shown that potential trade wars have no winners. Protectionist measures are not necessarily the best solution,” indicated the leader of the automobile association.
This request is based on the investigation that the Community Executive launched into imports of green cars from China, upon detecting that the subsidies provided by the Government of the Asian giant gave it a certain competitive advantage and allowed it to sell at lower prices, a practice that is not compatible with WTO rules. Brussels’ move was not well received by Beijing, which responded with its respective investigations into European imports from other sectors such as brandy, meat and dairy. Finally, the Community Executive decided to apply a 35.3% tariff on imports of Chinese electric cars.
“As far as China is concerned, the level playing field should not be used in a way that cuts off markets and jeopardizes long-established and well-functioning supply chains. Instead of building walls, the European internal market should be strengthened and made more resilient. Both regions, the EU and China, want to protect employment in their national markets, while reaping the benefits of free international trade,” indicated the leader of the European employers’ association to highlight that “both parties have an interest in reaching an agreement” and reach an “acceptable solution.
Regarding the shadow of tariffs that loom with the incoming US administration of Donald Trump, Källenius has highlighted the strong interdependence between Europe and the North American market. Therefore, he has indicated that the The EU has a lot to lose from increasing tensions with the US, as well as the community automobile industry.
The president of the European automobile association has set three priorities for the sector: a “realistic” path is necessary to decarbonize the sector, which takes into account the market and does not penalize it. Furthermore, he has demanded a solution to the “disproportionate costs” of meeting 2025 CO2 targets for cars and vans.
The second point he referred to is implementing the recommendations of the competitiveness report prepared by Italian Prime Minister Mario Draghi in favor of a regulatory framework that boosts the competitiveness of industries. Finally, he has advocated creating free and fair trade relations worldwide that are beneficial to the EU. “AND“It is essential to recognize that trade with China and the US is vital for the prosperity of the European economy,” he added in a letter to EU leaders.
In his opinion, the European Green Deal implemented in the previous community legislature “must undergo a review” so that it is “less rigid and more flexible.” The Mercedes Benz executive has shown a 6% drop in electric vehicle registrations in 2024, which distances the sector from meeting CO2 reduction objectives in the coming years.
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