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The EU disclosed the time for imposing tariffs on China, the US will ban Chinese automotive software, and Brazil also launched a trade investigation

2024-08-05

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According to media reports, EU Trade Commissioner Dombrovskis disclosed the official time for further taxation on Chinese electric vehicles. In a statement, he pointed out that EU member states are very likely to support the proposal to impose tariffs on Chinese electric vehicles in November. He explained that EU countries recognize the need to protect the group's automotive industry because China's share of the electric vehicle market is growing very fast, which is a problem that needs to be solved. Although China is the EU's second largest trading partner and the EU is interested in cooperating with China, the EU still believes that the "unbalanced" situation in bilateral trade relations needs to be changed.

In fact, the EU's action to impose temporary preliminary anti-subsidy duties on electric vehicles imported from China has officially begun since the beginning of last month. It is worth mentioning that the preliminary tariff refers to the bank guarantee provided by the supplier at this stage, rather than the actual payment of tariffs. Once the relevant resolution in November is passed and the EU makes the final decision to impose import tariffs, it will begin to actually impose tariffs. The time range given by the EU before was autumn. Dombrovskis' remarks further clarified the specific time. Before that, the two sides are bound to have fierce negotiations and games. According to the EU's plan, they will formulate a tariff range ranging from 17.4% to 37.6% depending on the manufacturer. Among the three major Chinese automakers, BYD's tariff is 17.4%, Geely's is 19.9%, and SAIC's is 37.6%. In addition, other electric vehicle manufacturers that "cooperate with the investigation but are not sampled" will be subject to a tariff of 20.8%, and electric vehicle manufacturers that do not cooperate with the investigation will be subject to a tariff of 37.6%. It is worth mentioning that the EU will calculate its import tax rate separately for Tesla produced in China.

EU member states are not highly consistent on the issue of imposing tariffs on Chinese electric vehicles. Not long ago, EU member states voted on the issue in written form, with 12 member states supporting the tax, 4 opposing it, and 11 abstaining from voting. Among the countries that abstained from voting, there are many automobile industry powers such as Germany. The half-vote support and a large number of abstentions reflect the wavering attitude of many EU member states, which are aware of the risk of a "trade war" with China. According to EU regulations, in order to prevent the decision from taking effect, 15 of the 27 EU member states must vote against it, and the population of these countries must account for at least 65% of the total population of the EU. At present, it seems that it is indeed unrealistic for China to win more EU member states to vote against it. If the EU really insists on passing the relevant agreement on imposing tariffs in November, China must be prepared in advance to respond, especially in the next consultations with the EU, to gain more rights and interests for itself.

Coincidentally, the EU's tariff weapon is ready to be used, and the US will increase the ban on China's automobile-related industries. According to foreign media reports, people familiar with the matter revealed that the US Department of Commerce is expected to propose a ban on the use of Chinese software in Level 3 and above autonomous driving cars and connected cars in the near future, and will also ban the testing of autonomous driving cars produced by Chinese companies on US roads. In another decision, the US also intends to ban vehicles equipped with advanced wireless communication function modules developed by China from driving on US roads. In the field of autonomous driving, Chinese automobile companies are at the forefront of the world. In order to prevent Chinese companies from obtaining more data and developing more intelligent autonomous driving models, the United States has gone to great lengths to suppress and restrict them.

In order to protect their previously advantageous automobile industries, European and American countries have built a high wall of trade protectionism. From their perspective, it seems that this is a necessary step. However, Brazil, which supports trade with China, suddenly launched an anti-dumping investigation on optical fibers originating from China. This is a bit difficult to understand. China and Brazil are both BRICS countries. The BRICS countries are expanding trade and preparing to break the hegemony of the US dollar and conduct local currency settlement. Brazil's trade investigation at this time seems a bit inappropriate. Regardless of the reason, it is hoped that Brazil will handle its trade relations with China with caution so as not to affect the overall situation of bilateral relations.