{"id":73398,"date":"2024-06-16T12:03:31","date_gmt":"2024-06-16T16:03:31","guid":{"rendered":"http:\/\/autosector.com\/?p=73398"},"modified":"2024-06-16T12:03:31","modified_gmt":"2024-06-16T16:03:31","slug":"chinese-tariffs-reaction","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=73398","title":{"rendered":"China weighs retaliatory options against Europe over EV tariffs without igniting trade war – Autoblog"},"content":{"rendered":"

China<\/a> is likely to adopt limited and targeted retaliation against the European Union after the bloc unveiled tariff increases on Chinese electric cars<\/a>, with Beijing wary that a more robust response could backfire.<\/p>\n

The EU move to take levies on Chinese vehicles to as high as 48% starting next month has it joining the United States, Turkey and other nations in acting to limit a surge in imports from China. China\u2019s Commerce Ministry and its chamber of commerce in the EU blasted the step by Brussels after the Wednesday announcement.<\/p>\n

While retaliation may help dissuade further trade-protection moves around the world, the danger for Beijing is that a too-strong response encourages further trans-Atlantic alignment against China \u2014 cutting against President Xi Jinping\u2019s efforts to encourage \u201cstrategic autonomy\u201d in Europe.<\/p>\n

\u201cIf China responds in kind with aggressive tariffs, they risk triggering a trade war,\u201d said Joe Peissel, an economic analyst at research firm Trivium China. \u201cBeijing is desperate\u201d to avoid that, he said.<\/p>\n

China already faces the prospect of increased trade tension with the US, as former President Donald Trump \u2014 who launched multiple rounds of tariff hikes on Chinese goods in his first term \u2014 leads in some polls ahead of the November election. Under President Joe Biden<\/a>, there\u2019s been increasing coordination among advanced economies against China, with the Group of Seven in recent weeks beginning to call out the nation by name for distorting the global economy.<\/p>\n

Merics, a Berlin-based research institute focusing on China, predicted that Chinese retaliation will focus on agricultural items like cheese and pork. After the EU began its anti-dumping investigation into electric vehicles<\/a>, Beijing started a probe into European liquor products like brandy. France, which pressed for the Chinese EV move by Brussels, is a major brandy exporter.<\/p>\n

Chinese firms have filed a formal request to authorities for an anti-dumping investigation into pork imports from the EU, state-run Global Times said Thursday. Any curbs on the products would hurt Spain, the largest EU supplier of the meat to China. State-run media have also signaled Beijing\u2019s considering tariffs as high as 25% on imported cars with large engines, which would affect a fraction of German carmakers\u2019 sales in the country.<\/p>\n

\u201cBeijing won\u2019t target the EU products it still needs,\u201d Merics lead analyst Jacob Gunter wrote in a note Thursday. Those goods include machinery, high-quality industrial inputs, chemicals and medical-technology items, he said.<\/p>\n

Avoiding \u2018overreaction\u2019<\/span><\/h2>\n

The impact of the EU\u2019s own move may also prove limited. The efficiency of China\u2019s carmakers means that even with the new tariffs in place they can likely still turn a profit. Chinese companies are also looking to rapidly build factories in Europe, which would blunt the impact of measures on imports.<\/p>\n

\u201cBeijing probably wants to avoid a tariff war while continuing to enable its EVs to enter the European market,\u201d said Ja Ian Chong, an associate professor of political science at the National University of Singapore. \u201cAn overreaction could jeopardize both aims.\u201d<\/p>\n

Chong said that retaliatory moves could be calibrated to target specific EU members or even particular districts in order to apply pressure.<\/p>\n

China\u2019s initial reaction amounted to a wave of verbal condemnation. The Ministry of Commerce demanded the EU correct its \u201cmistake.\u201d The Chinese Chamber of Commerce in the bloc called the move \u201cprotectionist\u201d and argued some allegations of subsidies were \u201cunfounded or exaggerated.\u201d<\/p>\n

China\u2019s strident opposition<\/span><\/h2>\n

\u201cThe EU has disregarded the facts and WTO rules, ignored China\u2019s repeated strong opposition, ignored the appeals and dissents of many EU member governments and industries, and has acted unilaterally. China is highly concerned and strongly dissatisfied with this, and the Chinese industry is deeply disappointed and firmly opposed to this.\u201d<\/p>\n

Ministry of Commerce statement<\/h2>\n

The Commerce Ministry spokesman at a briefing Thursday stated that China might complain to the World Trade Organization at some point.<\/p>\n

But in the meantime, the two sides may engage bilaterally. After announcing the new tariffs, the EU said it had contacted Chinese authorities \u201cto discuss these findings and explore possible ways to resolve the issues.\u201d<\/p>\n

\u201cThere\u2019s still space for negotiation,\u201d said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing. \u201cThe final decisions will be made in a few months, so there\u2019s still time. Even after the tariffs are levied, it is still possible to coordinate positions.\u201d<\/p>\n

Aviation and agriculture were among the sectors that Beijing privately warned the EU could be targeted before the Brussels decision, Bloomberg reported last week, citing a person familiar with the matter.<\/p>\n

There are various carrots that China can offer \u2014 France-based airplane maker Airbus SE is negotiating a major sale of aircraft to China at the moment, according to people familiar with the matter.<\/p>\n

Even so, the stick will also be used, according to Alicia Garcia Herrero, chief Asia Pacific economist at Natixis SA.<\/p>\n

\u201cThis is just the beginning,\u201d she said. \u201cChina won\u2019t retaliate right away but eventually they will find a way.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

China is likely to adopt limited and targeted retaliation against the European Union after the bloc unveiled tariff increases on Chinese electric cars, with Beijing wary that a more robust response could backfire. The EU move to take levies on Chinese vehicles to as high as 48% starting next month has it joining the United […]<\/p>\n","protected":false},"author":1,"featured_media":73399,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[2],"tags":[],"class_list":["post-73398","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry"],"_links":{"self":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/73398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=73398"}],"version-history":[{"count":0,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/73398\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/media\/73399"}],"wp:attachment":[{"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=73398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=73398"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=73398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}