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EU-China Trade Conflict Over Car Tariffs Intensifies: Potential Legal Battles and Economic Fallout

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The EU's punitive tariffs on Chinese electric cars have sparked threats of legal action and potential economic fallout. Federal Minister Wissing warns of consumer price hikes. Tesla plans to increase prices in response.


EU and China Trade Conflict Escalates Over Car Tariffs

The announced punitive tariffs against China have sparked swift reactions and potential legal battles. Following the EU's decision to impose tariffs on electric cars from China, Beijing has warned it may take the issue to the World Trade Organization (WTO). According to He Yadong, spokesman for the Chinese Ministry of Commerce, China is prepared to defend its companies' rights vigorously.

China argues that the EU's tariffs, which could reach up to 38.1 percent, violate WTO rules and constitute an act of trade protectionism. The Chinese government asserts that these tariffs would distort global automotive supply chains and disrupt mutually beneficial cooperation in the new energy vehicle sector.

Minister Wissing Warns of Economic Fallout

Germany's Federal Transport Minister, Volker Wissing, has voiced concerns over the potential economic fallout from these tariffs. Wissing stated that a trade war with China could be disastrous for Germany and the EU, emphasizing that consumers would ultimately bear the brunt through higher prices.

US electric car manufacturer Tesla has already announced plans to increase the prices of its Model 3 in EU states starting July 1, 2024, to offset the anticipated tariffs. The basic model, which currently costs 41,000 euros, could see its price surge to 49,600 euros, according to Elektroauto-News.net.

China's Retaliatory Measures and Broader Implications

In response, China is also considering increasing temporary tariffs on high-emitting petrol vehicles from the EU. Additionally, anti-dumping investigations into EU brandy and pork imports are underway, signaling a broader escalation in trade tensions.

The EU has expressed a willingness to negotiate with China to find an alternative solution to avoid long-term tariffs. However, the potential repercussions of this trade conflict continue to loom large over the global automotive industry and broader economic relations between these major economies.

  • Meanwhile, Chinese media have reported that domestic companies have applied for anti-dumping investigations into European pork imports. The findings of an ongoing anti-dumping probe into EU brandy imports are also expected to be released soon.
Clam Reports
Refs: | ANSA | Merkur |

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