China retaliates against EU over proposed tariffs on BYD

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【Summary】China and the EU are at odds over plans to impose tariffs on companies like BYD. The EU is conducting an anti-subsidy investigation to level the playing field against Chinese brands benefiting from state support. The Chinese government sees this as a protectionist act that will disrupt the global automotive industry. The move comes after pressure from the automotive industry, but not all parties are in favor of tariffs.

FutureCar Staff Sep 15, 2023 4:19 PM PT

China retaliates against EU over proposed tariffs on BYD

A major dispute is brewing between China and the European Union (EU) over potential tariffs on Chinese brands like BYD. The EU is planning an "anti-subsidy investigation" to help European manufacturers compete against their Chinese counterparts, according to Car Dealer. Ursula von der Leyen, president of the European Commission, expressed concerns about the "race to the bottom" caused by cut-price Asian brands benefiting from state support in China, which she believes distorts European markets. While Europe welcomes competition, von der Leyen emphasized the need to prevent firms from being undercut by cheaper alternatives.

The Chinese government has responded angrily to von der Leyen's comments and is threatening retaliatory action, as reported by The Times. China's ministry of commerce criticized the investigation as a "naked protectionist act" that would disrupt the global automotive industry and negatively impact China-EU economic and trade relations. They vowed to closely monitor the EU's protectionist tendencies and defend the rights and interests of Chinese companies.

Von der Leyen's announcement came after pressure from the automotive industry, which has been struggling with the influx of new Chinese firms. Carlos Tavares, the CEO of Stellantis, described the situation as a "terrible fight" for European brands and called for political assistance. However, not everyone agrees with the proposed tariffs. Mercedes believes that they would ultimately be counterproductive, and Volker Treier, head of trade at the German Chamber of Commerce and Industry, suggests that Europe should address Chinese distortions of competition without excessive subsidies or punitive tariffs.