EU governments face pivotal vote on Chinese EV tariffs (updated)

Allegro.eu SA

04/10/2024 07:55

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      Enough states back tariffs to push them through - sources
    

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      But Germany to oppose; Commission may seek compromise -
sources
    

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      Case is Commission's highest profile trade clash with
China
    

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      Beijing has threatened retaliation if tariffs go ahead
    

  
 (Adds context in paragraphs 6 and 8, Hungary comments in 13)
    By Philip Blenkinsop
       BRUSSELS, Oct 4 (Reuters) - European Union members face
a pivotal vote on Friday on whether to impose tariffs of up to
45% on imports of Chinese-made electric vehicles in the bloc's
highest profile trade case, which risks retaliation from
Beijing.
    The European Commission, which oversees the bloc's trade
policy, proposed final duties for the next five years to counter
what it sees as unfair Chinese subsidies after a year-long
anti-subsidy investigation.
    The EU’s proposal can be blocked if a qualified majority of
15 EU members, representing 65% of the EU population, vote
against it. But that is a high hurdle.
    Reuters reported on Wednesday that France, Greece, Italy and
Poland would vote in favour, enough to avert a blocking majority
against tariffs.   
    In the absence of a qualified majority either way, the EU
executive can adopt the tariffs. However, it could also submit
an amended proposal if it wanted to secure greater backing.
    The region's top economy and major car producer, Germany,
will vote against the introduction of tariffs, people with
knowledge of the matter told Reuters late on Thursday. It had
abstained in the first non-binding vote on the proposal in July.
    German carmakers, for which China represents almost a third
of their sales, have been particularly vocal against tariffs.
Volkswagen said they were "the wrong approach".
    While that rejection will not derail the result on Friday,
the toughening stance highlights Brussels' challenge in building
support for its trade case, potentially forcing the Commission
to carry out a second vote and consider possible compromises.
    The economy minister in Spain, a previous tariff backer,
also said in a letter to European Commission Vice President
Valdis Dombrovskis, seen by Reuters on Thursday, that instead of
imposing tariffs, the EU should "keep negotiations open...
beyond the binding vote" to strike a deal on prices as well as
the relocation of battery production to the bloc. 
    Spanish Prime Minister Pedro Sanchez had already said on a
visit to China that the EU should reconsider its position.
    
        
    Some EU members are nervous about Beijing's response. In
moves seen as a retaliation, Beijing this year launched its own
probes into imports of EU brandy, dairy and pork products.
    Hungarian Prime Minister Viktor Orban warned on Friday that
the EU was headed for an "economic cold war" with China
    However, the EU's stance towards Beijing has hardened in the
past five years, now viewing China as a potential partner in
some issues, but also as a competitor and a systemic rival.
   
 
    The Commission says China's spare production capacity of
three million EVs per year, which needed to be exported, is
twice the size of the EU market. Given 100% tariffs in the
United States and Canada, the most obvious outlet for those EVs
is Europe. 
    The EU executive has said it is willing to continue
negotiating an alternative to tariffs with China and could
re-examine a price undertaking - involving a minimum import
price and typically a volume cap - having previously rejected
those offered by Chinese companies.
    One option under negotiation is minimum import prices
calculated using criteria such as the range, battery performance
and length of the EV, along with whether it is two- or
four-wheel drive, a source familiar with the matter said.    
    The tariffs range from 7.8% for Tesla  TSLA.O  to 35.3% for
SAIC  600104.SS  and other companies deemed not to have
cooperated with the EU investigation. These tariffs are on top
of the EU's standard 10% import duty for cars. 

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Why EU tariffs matter to China EV makers?     https://reut.rs/3RrBt7t
EXPLAINER-What happens next as China-made EVs investigated by
EU?     urn:newsml:reuters.com:*:nL1N3LF0CE
FACTBOX-EU plans to hit China-based EV makers with additional
tariffs      urn:newsml:reuters.com:*:nL1N3LE0L
FACTBOX-German carmakers most exposed to Chinese counter-tariffs
     urn:newsml:reuters.com:*:nL8N3I90V3
FACTBOX-China's probes on EU products following EV tariffs    
 urn:newsml:reuters.com:*:nL1N3KG0BG
FACTBOX-What you need to know about China's widening probe of EU
imports      urn:newsml:reuters.com:*:nL1N3KA03S
EV exports from China to European countries    https://reut.rs/47fXVr8
China's top imports by value from major EU nations    https://reut.rs/3ZoVZuu
2023 Imports of EU goods affected by China's trade
investigations    https://reut.rs/3Ber3Tm
Falling car sales in Europe    https://reut.rs/3XWVIwy
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Philip Blenkinsop; Editing by Kirsten Donovan and
Mark Potter)
 ((philip.blenkinsop@thomsonreuters.com; +32 2 585 2869:
@reutersPhilB;))