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yesterday, the european union voted to impose countervailing duties on chinese electric vehicles.

on october 4 last year, the european commission launched a countervailing investigation into electric vehicles imported from china. a full year later, the eu is still taking action against chinese-made electric vehicles.

let’s first look at the impact of the resolution on chinese-made electric vehicles.

the eu's normal tariff rate for passenger cars is 10%, and chinese electric vehicles exported to the eu will be subject to additional countervailing duties of 7.8% to 35.3%.

specifically, tesla was subject to an additional tax of 7.8%, totaling 17.8%; byd was subject to an additional tax of 17%, totaling 27%; saic group was subject to an additional tax of 35.3%, totaling 45.3%.

car sales of chinese automakers in 13 european countries in 2023

judging from the export data of chinese car companies in 2023, the more car companies export, the more severe the tax will be imposed.

benefiting from the advantages of the industrial chain, china-made electric vehicles have a strong cost advantage compared to the eu, making the eu feel a sense of crisis.

after the additional tariffs are imposed, the competitiveness of chinese-made electric vehicles will be greatly weakened.

this is exactly the purpose of the eu tax increase.

faced with the eu's naked trade protectionism, how should china respond?

in fact, china has been seeking negotiations since last year when the eu was planning to raise taxes.

on june 12, the european commission disclosed the level of temporary tariffs imposed on battery electric vehicles imported from china.

the tax rates for byd, geely and saic are 17.4%, 20% and 38.1% respectively.

the tax rate adopted by the resolution must be lower than the temporary tariff level.

although the negotiations failed to prevent the resolution from being passed, they also appropriately reduced the tariff level.

negotiation will remain a necessary option in the future.

the bureau noted that the european commission stated in a statement that the eu and china continue to work hard to explore alternative solutions that are fully compliant with wto regulations, can adequately address the harmful subsidies identified by the commission’s investigation, and can monitor and executable.

it can be seen that the door to eu negotiations is still open to china.

according to regulations, if you want to veto the tariff increase bill, 15 of the 27 eu member states need to vote against it and represent at least 65% of the eu's total population. however, if the yes vote does not receive the support of a qualified majority, the tariff measures can still be implemented as long as the no votes do not meet the requirements.

it can be seen from this harsh regulation that once the bill to impose tariffs enters the voting process in the eu, it is almost impossible to veto it.

it didn't help that germany led the strong opposition before the vote.

however, the voting results are worth pondering:

10 countries are in favor: france, italy, the netherlands, poland, denmark, ireland, bulgaria, estonia, lithuania and latvia. (45.99% of eu population)

12 countries abstained: belgium, czech republic, greece, spain, croatia, cyprus, luxembourg, austria, portugal, romania, sweden and finland. (31.36% of eu population)

five countries opposed it: germany, hungary, malta, slovenia and slovakia. (22.65% of eu population)

the proportion of the population of different voting countries in the eu in the eu's tariff increase

whether it is the number of countries or the proportion of the population, the yes vote does not exceed 50%.

this shows that there are also large differences within the eu.

the eu is not monolithic and has also created room for negotiation for china.

the localized production of chinese car companies in the eu must be accelerated.

in the 2023 article "under eu countervailing investigation, chinese electric vehicles are promising", zhengjiang suggested that if chinese car companies want to avoid being blocked by the eu, a feasible strategy is to actively cross the barriers and become eu part of the system. (click on the title to read)

the eu's additional tariffs on chinese-made electric vehicles are actually forcing chinese car companies to operate locally in the eu and helping them improve the electric vehicle industry chain.

the roll price is not as good as the roll technology.

data shows that even after assembling cars locally in eastern europe, leading chinese companies will still have a 25% cost advantage over traditional eu automakers.

some people will ask whether we can continue to raise prices to ensure that we still have a price advantage even after the eu imposes high tariffs.

the correct answer is that blindly pursuing prices will not only plunge oneself into the "red ocean", but will also easily trigger trade frictions internationally.

instead of focusing on price, it’s better to focus on technology and find your own “ecological niche”.

before the vote that day, hungarian prime minister orban hit the nail on the head. the current eu economic strategy represents an "economic cold war."

the automobile industry, with its large scale, long chain and strong driving force, has become a "must battleground for military strategists".

the industrial "war" has begun, and there is no way to avoid it.