Chinese carmakers have reportedly called upon Beijing to raise tariffs on European gasoline-powered cars. This move is seen as a retaliatory measure against the European Union’s restrictions on the export of Chinese-made electric vehicles.
What Happened: The Chinese auto industry appealed during a closed-door meeting on Tuesday. The meeting was organized by China’s Ministry of Commerce and was attended by both Chinese and European car companies, including SAIC, BYD BYDDY, Bayerische Motoren Werke AG BMWYY, Volkswagen VWAGY, and Porsche Automobil POAHY, Reuters reported citing the state-backed Global Times.
The industry representatives suggested that Beijing should consider raising the provisional tariff on gasoline cars with large-displacement engines. This request comes in response to the EU’s recent imposition of tariffs to protect its car industry from Chinese competition.
“Personally, I think it is unfair to start a tariff war solely on the basis of (China’s) capacity utilization rate and insufficient demand for China’s new energy vehicles,” said Zhang Yansheng, chief research fellow, China Center for International Economic Exchanges.
The European Commission has indicated that it is open to discussing a mutually agreeable solution to the situation.
Why It Matters: EU car exports to China totaled €19.4 billion ($20.8 billion) in 2023, according to figures from the EU statistics agency. During the same period, the EU imported €9.7 billion worth of electric vehicles from China. China represents approximately 30% of sales for German carmakers.
Germany, the largest exporter of vehicles with engines of 2.5 liters or above, has exported $1.2 billion worth of such vehicles to China since the start of this year, according to Chinese customs data.
The EU’s decision to impose anti-subsidy duties on Chinese EVs in June has sparked a series of responses from China. The country has vowed to safeguard its interests and take all necessary steps to defend its rights. The move is seen as a response to China’s “unfair” use of state support for its EV manufacturers.
These new tariffs could potentially slow down Chinese automakers, but companies like Warren Buffet-backed BYD are expected to remain competitive. However, a Bain & Co. partner has cautioned that the ongoing price wars among Chinese EV manufacturers in overseas markets could potentially raise doubts about the quality of their products.
Read Next: Why Alibaba Stock Could Rally: Golden Cross In Sight
Photo courtesy: Shutterstock.
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
