Straight News: European Commission President Ursula von der Leyen said that even if the EU's tariffs on Chinese electric vehicles come into effect, negotiations with China will continue, what does this mean?
Special Commentator Chen Bing: von der Leyen's argument for continued negotiations has four meanings: the first is that the EU will impose tariffs on Chinese electric vehicles, but it does not mean that China and the EU have nothing to talk about, and there is still room for cooperation between the two sides, such as the minimum sales price of Chinese electric vehicles in Europe, how Chinese car companies invest in Europe, and so on. European car companies lack competitiveness, including investment and technology, so they are looking forward to Chinese companies investing and building factories in Europe, and there is room for negotiation in this regard.
The second is how European consumers will react after the EU imposes tariffs on Chinese electric vehicles, and whether European car companies can turn around through protectionist policies, which can be tested in about a year or two. If the EU's tariffs fail to achieve their objectives, then China and the EU can continue to negotiate tariffs. This time, the period for the EU to impose tariffs is 5 years, and it is not excluded that after a year or two, they will correct their mistakes.
The third is that the EU is following the United States Biden administration by imposing tariffs on Chinese electric vehicles. But the United States election is about to be announced, and whoever Trump and Harris are elected may adjust their China policies, including tariffs on China. The European Union may follow United States' new policy and negotiate with China again on the issue of tariffs on electric vehicles, which may increase, decline or even cancel.
Fourth, there are differences within the EU about the tariffs imposed on Chinese electric vehicles, and China's countermeasures are also targeted, such as "targeted strikes" against France, Italy, Netherlands, Denmark, Poland, Ireland and other countries that support tax increases. France has complained that an anti-dumping investigation of France cognac is unacceptable. Well, in a year or two, they will actually taste the pain of starting a trade war, and they may ask the EU to reopen tariff negotiations with China.
Straight News: On the issue of China's electric vehicle imports, United Kingdom seems to be maverick and not in tune with the EU, what do you think of United Kingdom's position?
Special commentator Chen Bing: United Kingdom has not made irresponsible remarks about Chinese electric vehicles, nor has it joined the ranks of the EU's tariffs, as if it is an "outsider". This just shows the significance of United Kingdom's "Brexit", which is unwilling to follow the EU as a bloc and loses its autonomy in safeguarding its own interests and decision-making. The United Kingdom has maintained its maverick and does not discuss tariffs on Chinese electric vehicles for probably three reasons:
First, as I just said, we want to explain the legitimacy of United Kingdom's "Brexit" and safeguard United Kingdom's interests. United Kingdom's car exports to China will account for 7% of exports in 2023, while most of United Kingdom's domestic electric vehicles are made in China, such as Tesla, BMW and SAIC's MG. United Kingdom is unwilling to follow the United States and the EU on the tariff issue, and is unwilling to harm the interests of China and the UK.
Second, the United Kingdom Labour government is trying to have good relations with China, even if it cannot return to the Sino-British "golden age" created by Cameron in power, it must restore normal Sino-British relations, hoping that China will further open the market for United Kingdom products, so it is unwilling to create new troubles on electric vehicles.
Third, the United Kingdom Labour government has promised to phase out fuel vehicles by 2030. To achieve this goal, the United Kingdom government is trying to strike a balance between protecting local car companies and promoting cheaper electric vehicles to consumers, and high-quality and affordable Chinese-made electric vehicles will help to promote the United Kingdom's green development goals. Therefore, the United Kingdom media ridiculed the EU's tariff policy as wanting to promote electric vehicles, but also unable to come up with money, dare not compete with Chinese car companies, and had to increase tariffs on Chinese electric vehicles. The result of the increase in tariffs will harm the transition to a green and low-carbon economy in Europe, and will not help boost consumer demand, but will deepen the dilemma of the European automotive industry in the epoch-making green transition.
Straight News: The Paris Motor Show kicked off on October 14, some people say that this is the stage for confrontation and competition between Chinese and European car companies, what do you think?
Special Commentator Chen Bing: The Paris Motor Show can be held in a beautiful and beautiful way, which is inseparable from the support of Chinese electric vehicle companies, especially on the eve of the EU's unfriendly tax hike measures against Chinese electric vehicle companies. I want to participate in the auto show, the Chinese electric car companies are all showing their latest beautiful cars to Paris, so that industry insiders and European consumers can see the charm of China's high-quality products, and more than 500,000 people are expected to come to visit. No matter how the EU explains to Europeans why it has imposed tariffs on Chinese electric vehicles, the Paris Motor Show is an open exhibition venue after all, and Europeans will have a basic evaluation of all kinds of exhibited vehicles, and make a judgment in terms of quality, styling, price, and performance.
European media said that this is a stage for Chinese and European car companies to clash, as if they were right. France President Emmanuel Macron said at the Paris Motor Show that due to the shrinking European car companies in the European market and fierce competition with China, "we need to protect ourselves" and offer tariffs to close the gap. BYD, a Chinese automaker, immediately pushed back, saying that the EU's tariffs on Chinese-made electric vehicles would raise prices and scare away buyers. Who's going to pay? Consumer. This will discourage the poor from buying cars, which is very unfair.
Interestingly, despite the imminent imminent tariffs by the EU, Chinese automakers are showing considerable confidence in trying to gain a foothold in a highly competitive market. Leapmotor has announced that it will open 500 sales points in Europe by the end of 2025. GAC Group said that we are a new force, and officially released the "European Market Plan", which will better understand and advance into the European market. Xpeng has unveiled a sleek sedan, the P7+, with deliveries explicitly stated in Europe starting next year. According to European experts, the price of Chinese electric vehicles is slightly lower than that of European competitors so far, which puts it in an advantageous position over the competition. After the EU imposes tariffs, it will cause certain losses to Chinese car companies, especially in profits, but Chinese car companies seem to be prepared and are laying out to produce cars in Europe to avoid tariffs. There is no doubt that the competition between Chinese and European electric vehicle companies will become more and more fierce.
Author丨Chen Bing
Typesetting丨Lai Xinhong
Editor丨Lai Chenlu
Reviewer丨Liu Liping
Producer丨Li Can