Investigation into Chinese subsidies for electric cars, the Middle Kingdom strikes back

In a speech given yesterday which we echoed to you, the President of the European Commission Ursula von der Leyen announced that an investigation would be launched by the European Union into the public subsidies from which Chinese manufacturers benefit, criticizing the fact that “global markets are today flooded with cheap electric cars whose price is artificially maintained by massive public subsidies”, in particular in response to a pressing request from France. As one might expect, China was quick to make it known that it did not agree with the said investigation…

“A protectionist measure which will have a negative impact on economic and commercial relations between China and the European Union”

China’s Commerce Minister warned the EU that the investigation is “a purely protectionist measure that will seriously disrupt and distort the global automotive industry and supply chain, including that of the EU, and will have an impact negative on economic and trade relations between China and the EU. He also added that China would “grant
pay close attention to the EU’s protectionist tendencies and will firmly protect the legitimate rights and interests of Chinese enterprises.”

There is no question of a counter-attack yet, but the warning could not be clearer. From what our colleagues at Bloomberg have been able to understand, it is envisaged that customs duties will approach those already imposed by the United States on Chinese electric vehicles, which amount to 27.5%. Since the investigation could last a total of 9 months, we will nevertheless have to be patient before seeing what outcome this case will take.

Source : Reuters via Automotive News Europe

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