"China may have to do something"

On Tuesday evening (21 local time), the European Union China Chamber of Commerce issued a statement on the official account of social platform X, saying that it learned from insiders that China might consider raising temporary tariff rates on imported vehicles equipped with large displacement engines.

The statement pointed out that this potential move will have an impact on both European and American automobile manufacturers, especially in view of the background of the recent successive troubles of the United States and Europe against China's electric vehicles. The South China Morning Post 22, a Hong Kong media, reported that this "anti system" measure would counter the trade action taken by Europe and the United States against China's electric vehicles.

Hong Kong media said that Liu Bin, the chief expert of the China Automotive Technology Research Center and the deputy director of the China Automotive Strategy and Policy Research Center, had disclosed relevant information when receiving an interview. The European Union China Chamber of Commerce also quoted in its statement that, according to WTO rules, China's temporary tariff rate on imported gasoline cars and SUVs with engine displacement greater than 2.5L can be considered to be increased to 25% at most.

Liu Bin stressed that this adjustment proposal reflects China's determination to pursue the "dual carbon" goal and accelerate green development, and conforms to WTO rules and market economy principles.

It is reported that in 2023, China will import about 250000 vehicles with engine displacement greater than 2.5L, accounting for 32% of the total number of imported vehicles, and import large engine vehicles will also account for 80% of China's consumption of large engine vehicles. If the temporary tariff rate is increased, it will have a significant impact on the cars imported from the EU, as well as the cars imported from the United States.

Screenshot from the X account of the European Union China Chamber of Commerce

The South China Morning Post mentioned that the announcement came at a time when trade relations between China and western powers were in tension. Last week, despite China's strong opposition, the Biden government announced that it would impose high tariffs on a number of Chinese products exported to the United States, especially the import tariff on Chinese electric vehicles, which has also raised concerns in Germany, Sweden and other countries.

On the 21st local time, when US Treasury Secretary Yellen visited Frankfurt, Germany, he tried to woo the EU to jointly deal with China's so-called "overcapacity". Its alarmist statement said that the United States and its Western allies must deal with China's growing manufacturing strength "in a united way", or their own industries will be in danger.

In her speech, she also excused the new US tariff rules, saying that the US had no intention of implementing anti China policies, that China's "overcapacity" might "threaten the survival of factories around the world", and that the US tariff hike was a "strategic and targeted measure".

Yellen met with bank executives during her visit to Frankfurt, and will attend the G7 finance ministers' meeting in Italy later this week

However, the European Union seems to be less active in this olive branch that the United States has thrown out. According to the Financial Times, at the election debate held in Brussels later that day, European Commission President Von Delaine said that the EU would not follow the United States in imposing tariffs on China. The EU would adopt a different approach from Washington's "tariff package" and would "customize" tariffs on China.

According to the Wall Street Journal, she hinted in her speech that any tariff eventually imposed by the EU would be lower than the 100% tariff imposed by the United States on Chinese electric vehicles last week.

The Financial Times said that with less than a month to go before the election of the European Parliament, Von Drain is seeking re-election as the president of the European Commission. At the debate, she "played down" the possibility of a trade war with China and played a word game

Source | Observer Network