China has signaled it is ready to unleash tariffs as high as 25 percent on imported vehicles with large engines, as trade tensions escalate with the US and EU.
The China Chamber of Commerce to the EU said in a statement on X that it was informed about the potential move by “insiders.”
The levies would affect European and US automakers and have a “significant” impact on relations with the EU, it said.
Photo: AFP
Beijing is ramping up threats of retaliation as a deadline looms for the EU to announce the results of its probe into China’s electric vehicle (EV) subsidies. The bloc must inform Chinese exporters whether it intends to impose tariffs by early next month, and they could go into effect a month later, Eurasia Group has said.
“China’s retaliatory trade investigations and warnings are not deterring the EU,” Eurasia Group analysts wrote in a note on Tuesday. “Brussels is eager to send a strong signal to Beijing with its EV probe that the EU will counteract Chinese subsidies and overcapacity.”
The commerce chamber referred to an interview published by the Chinese Communist Party’s Global Times newspaper on Tuesday in which Liu Bin (劉斌), chief expert at the China Automotive Technology & Research Center, called for temporarily increasing the tariff rate on vehicles with engines larger than 2.5 liters.
China imported 250,000 vehicles in that bracket last year and WTO rules would permit a tariff of up to 25 percent, the report cited Liu as saying.
The charge on passenger vehicle imports from Europe is currently 15 percent, the Chinese Ministry of Commerce’s tariff search page showed.
The automakers most impacted would be Mercedes-Benz Group AG, Toyota Motor Corp and BMW AG, said Daniel Kollar, head of consultancy Intralink’s automotive and mobility practice.
In addition to the jab at the auto trade, China has hinted it could impose tit-for-tat levies on European wine and dairy products, and has begun an investigation into European exports of brandy.
Amid global concern about China’s surging exports, the EV industry is drawing especially close attention. China produces more EVs than anywhere else, and controls a majority of the battery supply chain.
With a price war and slowing economy at home, its automakers are seeking to expand overseas. They exported 1.55 million EVs last year, about 40 percent of them to Europe.
US President Joe Biden’s administration earlier this month announced 100 percent tariffs on Chinese EVs, while the EU is investigating Beijing’s subsidies across a range of industries, which has prompted Chinese firms to pull out of rail and energy tenders.
“Certain countries and regions have taken restrictive measures in the new-energy vehicle sector, which run counter to the green development concept,” Liu said in the Global Times interview. “Such measures will only hurt the interests of their own consumers.”
US Secretary of the Treasury Janet Yellen said on Tuesday she was pushing for G7 allies at a finance ministers meeting in Italy to jointly push back on China's industrial policies, although she said she was not asking them to mirror the new US tariffs.
The G7 industrial democracies are the US, Japan, Germany, France, Britain, Italy and Canada.
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