Europe shakes! China may impose tariffs on imported cars from the West, and Von Delain "re exports"

China may now take retaliatory measures after the US tariffs on China's electric vehicle imports quadrupled. The German Economic Weekly said on the 22nd that the European Union China Chamber of Commerce warned that China would impose higher tariffs on large engine vehicles. This will affect the cars produced in Europe, Japan and the United States, especially the Toyota, Mercedes Benz and BMW brands. On the same day, the stock prices of three major German automobile brands fell in unison. The parties are putting an end to Von Drain's tariff plan.

Volkswagen at Beijing Auto Show

China's imposition of new tariffs complies with WTO regulations

The European Union China Chamber of Commerce announced a statement on social platform X, saying that from "insiders", China is considering imposing a 25% tariff on imported large engine vehicles. The Chamber continued that this possible measure "has had an impact on European and American automakers, especially in view of recent developments".

Last week, US President Biden imposed a special tariff of 100% on electric vehicles imported from China. The EU is currently investigating the extent to which China distorts the electric vehicle market. Whether the EU also wants to impose punitive tariffs remains to be decided.

German Economic Weekly reported

The Chamber of Commerce mentioned an interview published by a Chinese newspaper on Tuesday. In the article, Liu Bin of China Automotive Technology Research Center called for a temporary increase in tariffs on imported vehicles with engines above 2.5 liters. At present, the tariff for cars imported from Europe is 15%. According to Liu, the rules of the World Trade Organization even allow a 25% tariff on each vehicle. According to Liu, China imported 250000 such cars last year.

The German news agency said that in the trade dispute between China and the West, the Beijing Ministry of Commerce only launched an anti-dumping investigation on some chemicals originating in the EU, the United States, Japan and Taiwan on Sunday. These chemicals are "copolymerized paraformaldehyde", which "can partially replace copper, zinc, tin, lead and other metal materials", and are used in automotive parts, electrical equipment, industrial machinery and other fields. The Swiss newspaper New Zurich said that in addition to the anti-dumping investigation on western special chemicals, various signs indicated that China's future anti-dumping measures might also impose new tariffs on European agricultural products, including dairy products and wine, as well as aircraft parts.

CEO of Volkswagen, BMW and Mercedes Benz

German auto stocks fell

Germany and Slovakia are particularly affected by tariff barriers. According to the Austrian News, Daniel Kolar, head of Intralink's automotive and mobile consulting department, Toyota, Mercedes Benz and BMW brands are particularly vulnerable. For example, BMW X7 will be affected; The car is made in the United States, but it is mainly aimed at American consumers and Chinese consumers.

Last year, China exported 1.55 million electric vehicles, of which about 40% were sold to Europe. In 2022, the EU exported about 391000 vehicles to China, worth 24.2 billion euros. About 17300 of them are battery powered. In 2022, the automobile export volume of the United States will be about 58 billion dollars. Canada ($16.9 billion) and Germany ($6.7 billion) are the two most important sales markets, followed by China (about $5.8 billion).

Investors stopped buying auto shares on Wednesday, fearing that China might impose punitive tariffs. Mercedes Benz shares fell 2% in the morning, BMW shares fell 1.5% and Volkswagen shares fell 1%. BMW and other automobile manufacturers have warned the European Union not to impose auto tariffs.

German Automobile Factory

The political and economic circles unanimously oppose the EU

In Europe, the largest exporter with close ties to China is particularly concerned about taxes imposed by the EU and the United States. German Chancellor Schultz feared that new trade restrictions and countermeasures would continue to emerge: "protectionism". He warned that "everything will only become more expensive in the end." On the other hand, a large number of further planned tariff rises may actually trigger an overall price rise effect. This will be the worst situation for the Berlin Traffic Light Alliance.

BGA, the German Foreign Trade Association, warned the EU not to follow the example of the United States, because the German automobile industry would be particularly affected. Deke Jandulla, chairman of BGA, said that no car in the EU has no parts from China, and German manufacturers also import electric vehicles from China. Europe must accept competition and improve its competitiveness.

German Chancellor Schultz at the Auto Show

Joachim Nagel, the governor of the German central bank, also refused to allow the EU to raise tariffs on China. He told the Business Daily that the imposition of tariffs on foreign products usually makes imported products more expensive, thus raising domestic prices and harming the interests of consumers. In addition, China will certainly consider taking retaliatory measures. China is a very important trading partner of the EU, and the EU is also very important to China. Rules and negotiations may be an alternative to mutual tariff escalation.

The European ACE Automobile Club calls for avoiding punitive tariffs on foreign electric vehicles. According to ACE, people have long criticized that there are too few affordable electric vehicles. Now, the models with attractive prices from abroad can make it possible for many consumers to turn to electric vehicles economically. From the perspective of the automobile club, artificially raising prices has harmed the interests of consumers.

BMW Headquarters

Von Delain "changed his mind"

Since the United States levied taxes, European Commission President Von Delain has remained silent. Previously, she strongly said that the EU was ready to tax Chinese cars. However, at the election debate held in Brussels this week, she said that the EU would not follow the United States in levying tariffs on China. The EU would adopt a different approach from Washington's "package of tariffs" and would "customize" tariffs on China. In her speech, she hinted 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.

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

Von Delain participated in the activity

German Economic Weekly pointed out that Von Delain was still unwilling to give up the tariff on Chinese cars under the opposition of Germany and other countries. She wanted to win the election with the strategy of "Europe first", which comforted France and Italy, but Germany, Sweden, Hungary and other countries clearly opposed it. It is impossible for Von Delain to be re elected by tariff. There are fewer and fewer people in Europe who support her. Makron and Scholtz are looking for someone to replace her. Just as BMW CEO Kipchak warned the EU not to "lift a stone and hit yourself in the foot" with higher tariffs.