The EU's tariffs on electric vehicles in China will be lifted on July 4, why did Germany back down first? German experts warned that China's natural advantages are too great, and European car companies will suffer a heavy blow. At a time when the EU is struggling, China has found a way to break the situation!
The EU imposed additional tariffs on China, and Germany retreated
According to a report by the Observer on June 7, the European Union is expected to impose temporary tariffs on electric vehicles manufactured in China from July 4. According to the report, on June 3, a Chinese automobile association sent someone to participate in the relevant hearings held by the European Union in Brussels, and was informed of the EU's plan to impose taxes, but did not disclose the specific tariff rate. Chinese companies involved in the tariffs have decided to seek legal advice and challenge the EU's unreasonable practices.
The EU's planned tariffs began at the end of 2023, when European Commission President Ursula von der Leyen, who was about to visit China, announced that she would launch an anti-dumping investigation into Chinese electric vehicles. The context of the incident is very clear, both the United States behind the promotion, but also France in the internal help, the purpose is to hit the German auto industry, the French side believes that if the launch of sanctions on China's new energy vehicles, will provoke China's countermeasures, then the brunt of the disaster is in Europe almost a monopoly of the German auto industry, which will win opportunities for the development of the French auto industry, so that it can get more opportunities in the competition with German cars within the European Union.
It is precisely because of the clear understanding that behind the EU's tariffs on China this time is not the "subsidy factor", "technical factor" or even "human rights factor" mentioned by the Brussels masters, but the high-sounding banner and the actual purpose is to sharpen the knife to its own trade factor. German Chancellor Olaf Scholz said in a speech that quarantine measures and illegal tariff barriers will only end up making everything more expensive and making everyone poorer.
Experts warn of China's "natural advantage" and the undesirable consequences of imposing tariffs
Ferdinand Dudenhoff, a well-known German automotive economic expert and known as Germany's "godfather of automobiles", wrote that the tariffs will significantly increase the price of electric vehicles in Germany, which will not only make it impossible for German consumers to buy cheap electric vehicles, but also have adverse consequences for the clean energy transition of European automakers, resulting in a decline in German demand for new energy vehicles. In it, he debunked the lies of von der Leyen and the people behind it, arguing that the success of China's auto industry was not due to the state subsidies they criticized, but to the economies of scale of China's current huge industrial sector. China is a unified market of 1.4 billion people, and is the world's largest industrial country, and the scale effect in the industrial field is extremely terrible, the so-called "developed country crusher", in fact, is a side embodiment of this scale effect.
For example, someone who is naturally tall and someone who is naturally fast is a natural runner, a person who is naturally tall is suitable for basketball, and a person who is naturally fast is suitable for a 100-meter race. The tariff penalties launched by the EU against Chinese electric vehicles are like a person who is not tall enough and does not run fast enough, trying to make himself more suitable for playing "new basketball games under the rules" and "new 100-meter races under the rules" than people who are taller by formulating an unfair system of rules. To put it bluntly, after a country with a first-mover advantage gradually loses its first-mover advantage, it becomes difficult to accept the objective reality and begins to roll around, treating a temporary lead as an eternal lead, and instead of thinking about how to maintain its development advantage, it only thinks about how to play with rules, engage in unfair competition and trade protectionism, so as to keep others behind.
Europe wants to lose both, but China has a way to break the deadlock
It is worth mentioning that Chinese automakers have been actively seeking ways to deal with the tariff sanctions planned by the EU, one of which is to invest in building factories in Europe. Hungary, Spain and Italy are all actively lobbying Chinese automakers to invest in their countries, all of which are located in south-central Europe and have lower labor costs than northern Europe, Reuters said in a report.
While the actual cost of manufacturing a car in Europe is still higher than that of manufacturing a car in China, after deducting transportation costs and tariffs, the relative cost may be equal to or even lower than the cost of manufacturing in China.
Hungary is one of the countries with the best relations with China in the EU, and has spoken out for China on many occasions in the EU. Spain and Italy, on the other hand, are members of the "European Pig Five", two relatively backward countries in the European Union, and have an urgent incentive to get rid of the current economic malaise and seek all possible external investment. These countries have taken the initiative to seek China to set up factories in their own countries, which objectively reflects the disunity within the EU. The imposition of tariffs on China itself is a product of Franco-German infighting, and supporting Chinese car companies to build factories in Europe seems to be using the tariffs to attract investment, but considering that the EU only has a unified monetary policy and no unified economic and trade policy, this will actually only stimulate the economies of some European countries, and make these European countries rebel against the EU's policies, exacerbating friction within the EU.
Reuters said in a report that a senior executive of a traditional European automaker revealed to him that the tariffs on China may temporarily reduce or eliminate the cost advantage of Chinese automakers, but this will not prevent China's auto industry from making money and developing. Richard Laub, the CEO of Belgian Dragon Sourcing, said in an interview that the general trend in Europe is for companies to reduce their dependence on China and increase their efforts to find alternatives, while "de-risking measures are unlikely to hit China's overall exports too hard."
This kind of contradictory remarks is the embodiment of the schizophrenia of the Europeans in their China policy, which wants to maintain their leading position relative to China, but also does not want to pay too much effort and price, and also wants to maintain the psychological superiority of the past. The result is to introduce a series of policies that will hurt both sides, giving up their own future in exchange for a momentary sense of pleasure, and only then will they find that this will not fundamentally impact China, but will stimulate other countries to engage in real "de-risking" and eliminate the risks brought to them by Western countries.