Sanctions against Chinese car companies, car owners benefit! China may reduce import taxes and abandon tariffs in exchange for the EU

Zhiyi Automobile

2024-06-30 20:17

Zhiyi Auto / Li Jingwen

Recently, it has been reported that Germany is trying to persuade the European Union to withdraw the tariff increase measures for Chinese electric vehicles, which may bring more benefits to German automakers. Previously, the European Union planned to raise the import tax cap on Chinese pure electric vehicles to 38.1%, but German government officials are actively exploring ways to ensure that the tax is not implemented in practice.

The Mystery Strategy in Taxation: Killing Two Birds with One Stone

China's import tax on automobiles may eliminate the 12-40% excise tax on large-displacement vehicles in Europe. On the one hand, a person familiar with the matter revealed that as a condition for the EU to abandon the tariff on Chinese electric vehicles, China can reduce tariffs on the import of large-displacement cars. At present, China has imposed a 15% tax on passenger cars imported from the EU, and China and the EU have held consultations on the EU's countervailing investigation of Chinese electric vehicles, and this issue has been discussed.

Not long ago, while the United States cracked down on China's electric vehicle industry, the European Union also began to hype up China's "overcapacity" argument, announcing that it would impose tariffs on China's electric vehicle industry. However, with the preparation of China's domineering warnings and countermeasures, the German side is obviously anxious, not only the German high-level soon visited China, but even the Polish president has continued to show goodwill to China, hoping to better strengthen cooperation with China, which is also to avoid China's counterattack on the EU being implicated.

The deep meaning behind the tax cut is hotly debated

At present, the Western media openly declare that China will reduce the tariffs on Western large-displacement vehicles, and take the initiative to make concessions.

The first is that seeing that the EU's "deadline" with China is getting closer and closer, it finds that it is impossible to withstand a tough counterattack from China, so it begins to look for a "step" for itself. Trying to save face through the "soft" public opinion released by the Chinese side, in order to cancel the decision to impose tariffs on Chinese electric vehicles.

The second is that European luxury cars are highly dependent on the Chinese market, like many luxury brands in Germany, which have a large number of customers in China and earn a lot of profits from the Chinese market.

It is worth noting that when the Western media claimed that China would cut taxes on large-displacement cars, in recent days, European and American car companies have said that China has not actually introduced corresponding policies. In this way, it is obvious that in fact, this time it is likely that the EU hopes to cancel the tariffs as a condition in exchange for China to reduce tariffs on Western large-displacement vehicles, in fact, the EU has released a conciliatory signal to make concessions. As a result, the Western media began to play the game of "reversing cause and effect", hoping to send a signal of submission to China without losing face.

Who will benefit from the "privileges" of European luxury cars?

The main purpose of the tax reduction is to export large displacement cars, also known as premium cars, to Europe to China. Super luxury brands such as Lamborghini and Ferrari are undoubtedly the biggest beneficiaries under this policy. But these cars do not sell much in China, selling only a few thousand units a year. Best-selling models like Mercedes-Benz GLS, GLE, and BMW X7 are actually made in the United States and do not have this "privilege". This not only gave European cars a taste of "sweetness", but also made American cars come to a "dismount". What do you think about this wave of operations in the EU?

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