- Brussels to impose additional tariffs of up to 38% on Chinese-made EVs
- The move was aimed at protecting automakers who felt China was undercutting them on prices.
- Now, the Chinese government is stepping up its rhetoric.
Officials in Beijing have warned that stiff tariffs on electric cars “could spark a trade war” with Europe.
Tensions have been rising in recent weeks after Brussels announced it would impose additional tariffs of up to 38% on Chinese-made electric vehicles (EVs).
The move is aimed at protecting European automakers who feel they are being undercut by Chinese companies such as BYD and Geely. The tariffs, which are on top of an existing 10% tariff on cars imported into the EU, will mean European automakers will face a total tariff of as much as 48%.
But the move, the result of a nine-month investigation, threatens to drive up EV prices. Chinese companies have been urging Beijing to hit back against European cars, and now the Chinese government is stepping up its rhetoric.
“The European side continues to intensify trade frictions, which may provoke a trade war,” a spokesman for China’s Ministry of Commerce said yesterday. “The responsibility lies entirely with the European side.”
The remarks came shortly before German Economy Minister Robert Harbeck began a three-day visit to the region in an effort to placate Chinese anger.
German automakers will be most affected by a backlash from China, as nearly a third of their sales came from there last year.
EU car exports to China are expected to reach £16.5 billion in 2023, while the EU has bought £8.2 billion worth of electric cars from China, according to figures from Eurostat.
British brands such as MG and Lotus, both owned by Chinese parent companies, could also be caught up in the attack.
US automaker Tesla has also hinted at raising prices of its EVs in the face of tariffs.
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The Tesla Model Y, which costs around £45,000, is currently the most popular electric car in the UK.
The latest European tariffs are due to come into effect on July 5 unless China and the EU reach an agreement. Britain has remained silent on whether it will impose its own tariffs, with ministers previously saying they would wait to see the results of the European investigation.
And Britain has taken a more welcoming stance toward China’s auto industry in an effort to attract Chinese companies to set up manufacturing facilities in the country.
In November, Investment Secretary Lord Johnson said the UK could use the freedoms it gains from leaving the EU to sell electric cars from Chinese companies globally.
“China has a very strong electric vehicle industry, they have a lot of great technology and they make great cars,” he said.
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