8:21 am, September 15, 2023
A major row is brewing between China and the EU over plans which could result in tariffs being placed on the likes of BYD.
Car Dealer reported earlier this week that the EU is planning an ‘anti-subsidy investigation’ in a bid to help European manufacturers compete with their Chinese counterparts.
Ursula von der Leyen, president of the European Commission, said that cut-price Asian brands, which benefit from major state support in China, have kicked off a ‘race to the bottom’ which is ‘distorting’ European markets.
In her annual state of the union address to EU lawmakers, the 64-year-old said that Europe was ‘open to competition’ but did not want to see firms ‘undercut’ by cheaper alternatives.
The comments have drawn angry response from the Chinese government which is now threatening ‘retaliatory action’, according to The Times.
China’s ministry of commerce said: ‘[This investigation is] a naked protectionist act that will seriously disrupt and distort the global automotive industry and supply chain, including the EU and will have a negative impact on China-EU economic and trade relations.
‘China will pay close attention to the EU’s protectionist tendencies and follow-up actions, and firmly safeguard the legitimate rights and interests of Chinese companies.’
President von der Leyen made her announcement following pressure from the automotive industry over recent months.
Earlier this year, Stellantis boss Carlos Tavares said European brands were facing ‘terrible fight’ amidst an influx of new Chinese firms.
He added that the situation has left Europe’s automotive industry at a crossroads and has called for assistance from politicians.
However not everyone agrees, with Mercedes saying that tariffs would ultimately end up being ‘counterproductive’.
Elsewhere, Volker Treier, head of trade at the German Chamber of Commerce and Industry, said: ‘Chinese distortions of competition are a particular problem that Europe should tackle, but if possible not with excessive subsidies or new punitive tariffs at the end of a lengthy process.’
