The European Union is set to impose punitive tariffs on Chinese electric cars in July, which could potentially spark a trade war, according to a report by the Financial Times. The decision to impose tariffs comes after an investigation initiated by the EU Commission in the fall of last year, which suspects that the Chinese government provides generous support to electric car production, distorting competition in the market.
If implemented, the tariffs could increase the cost for Chinese electric cars by an average of around 5,000 euros per car, compared to the current 10 percent tariff on imported cars to the EU. However, there is division among EU countries regarding these punitive measures. While France supports them due to concerns about competition and undercutting of European markets, Germany, Sweden, and Hungary oppose them.
The decision to impose tariffs may have implications for the automotive industry and may lead to tensions between the EU and China. In response to potential tariffs, China already imposes a 15 percent duty on electric cars exported to the East. This creates a complex trade dynamic between the two regions and highlights global trade tensions.
The outcome of these tariffs will likely shape the trade relationship between the EU and China in the coming years. As such, it is important for both sides to consider their actions carefully and work towards finding a mutually beneficial solution that does not escalate tensions further or harm industries and markets globally.
