These two days have been messy enough. First, the EU said it would impose high tariffs on Chinese electric vehicles, and then China announced that it would impose anti-dumping duties on France brandy. This coming and going made everyone a little confused. Who started the incident first? Will this mutual harm really solve the problem?
Electric cars have become a thorn in the side
We have to start from the beginning. In recent years, China's electric vehicles have been booming in the European market. Whether it is BYD, NIO or Xpeng, they have all seized a lot of market share in Europe. This can make the local European car companies anxious.
Take France as an example, their proud Citroen and Peugeot are operating dismal in the Chinese market. According to statistics, sales of France cars in China fell by almost 30% last year! This makes the France very uncomfortable.
So under the strong lobbying of France, the EU finally passed a tax increase plan for Chinese electric vehicles in March this year. It is said that this plan may impose a tariff of up to 25% on Chinese electric vehicles!
European Commission President Ursula von der Leyen also said in a heartfelt manner: "We want to level the playing field. This is as if China's electric vehicles have succeeded in the European market by unfair means.
Brandy was tragically destroyed by pond fish
In the face of the EU's "provocation", China will naturally not sit idly by. On April 1, the Ministry of Commerce announced the implementation of temporary anti-dumping measures on imported brandies originating in the European Union. As soon as this news came out, the France were frightened.
Brandy is one of France's flagship products. Last year, France exported brandy to China worth 1.2 billion euros. If this business fails, it will undoubtedly be a big blow to the France economy.
Boene, foreign adviser to the President of France, hurriedly called the Chinese side to express concern. This is good, I originally wanted to crack down on Chinese electric vehicles, but instead I put my own brandy into it. What is it called? It's called shooting yourself in the foot!
There are no winners in trade wars
To be honest, this kind of back-and-forth trade war will only hurt consumers and businesses in both countries in the end.
Take electric vehicles as an example, such a tax increase by the EU will inevitably lead to the rise in the price of Chinese electric vehicles in Europe. At that time, it will be difficult for European consumers to buy cheap electric vehicles. Moreover, it will also affect the process of new energy transition in Europe.
In turn, China's imposition of anti-dumping duties on brandy will undoubtedly make it impossible for domestic consumers to buy cheap imported brandy. Those who love to drink foreign wine are probably going to faint in the toilet from crying.
What's more, once this vicious circle begins, it's hard to say how far it will go. If it turns into a full-blown trade war, it will be catastrophic for both sides.
Cooperation is the way to go
Actually, instead of hurting each other, it's better to sit down and have a good talk. The economic and trade cooperation between China and the EU has a long history, and both sides have benefited a lot from it.
In the automotive industry, although Chinese electric vehicles are performing well in the European market, traditional European car brands also have a significant share of the Chinese market. Volkswagen, Mercedes-Benz, and BMW are all popular brands in China.
Speaking of brandy, although China can now brew its own, to be honest, there is still a gap with France. France brandy has always had a good reputation in the high-end market in China.
So, instead of engaging in a trade war, the two sides should sit down and have a good talk and see how we can achieve mutual benefit and win-win results. For example, Chinese electric vehicle companies can consider setting up factories in Europe to create jobs. European automakers can also increase investment in China to improve market competitiveness.
Equality and mutual benefit can be long-lasting
Looking back on this incident, I feel that there is something wrong with both sides. As soon as the EU came up, it imposed discriminatory tariffs on Chinese electric vehicles, which is indeed a bit unkind. China's choice of brandy as a countertarget, although the effect of the attack is obvious, but it is also a bit of a suspicion of hurting the innocent.
In fact, the most important thing in economic and trade exchanges between countries is equality and mutual benefit. The relationship can only last for a long time if both parties benefit from it.
It is hoped that this turmoil can serve as a warning to both sides, and that they can communicate and negotiate more when dealing with similar issues in the future to avoid the escalation of contradictions. After all, in this era of globalization, no one can do without anyone.
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