China Carbon Credit Platform

The EU miscalculated the tax increase on electric vehicles in China

Release Time1 month ago

On June 12, the European Commission issued a preliminary ruling on a countervailing investigation on electric vehicles in China, revealing that it plans to impose temporary countervailing duties on electric vehicles imported from China. The European side ignores the objective fact that China's electric vehicle advantages come from open competition and WTO rules, ignores China's repeated strong objections, and ignores the appeals and dissuasion of the governments and industries of many EU member states. It is in the name of "maintaining fair competition"."Destroying fair competition".

The European Union follows in the footsteps of the United States in offering a "tariff stick" and insists on taking protectionist actions, which not only harms the legitimate rights and interests of China's electric vehicle industry, but also disrupts and distorts the global automobile industry and supply chains, including the European Union. The EU politicizes and weaponizes economic and trade issues, which will affect the atmosphere of China-EU bilateral economic and trade cooperation, harm the interests of EU consumers themselves, and undermine the EU's own green transformation and the overall situation of global cooperation on climate change.

The EU has increased taxes on electric vehicles in China, causing global free trade to encounter another blow. This is because the EU cannot calculate the "rules and order account." China and Europe are an important part of the global industrial and supply chains. Germany and other EU countries are deeply integrated with China's automobile industry and supply chains. EU policymakers should understand that in the current era of economic globalization, imposing tariffs on the automobile industry will only further distort the market and then divide the global production and supply chain, which will do harm but not benefit the long-term development of the automobile industry.

Cultivating advantages in competition is the way for enterprises to survive. If they want to rely on tax policies to create comfort zones, this is the EU's miscalculation of the "economic development account." Many European car company executives believe that raising tariffs will not help European car giants cope with competition from Chinese car companies. EU policymakers should understand that the key to the sudden emergence of China's electric vehicle industry is not closed exclusivity, but open cooperation. Many multinational car companies such as Volkswagen and Strantiis have joint ventures with Chinese new energy vehicle companies to build factories. Inject new impetus into your own development.

The EU's tax increase on electric vehicles in China is actually at the expense of EU consumers. Chinese brand electric vehicles are selling well in the EU, relying on competitive prices, high-quality performance and complete services. Nowadays, the EU wields a big stick of tariffs, which has greatly increased the cost of car purchases for EU consumers. A research report recently released by the Institute for World Economics in Kiel, Germany, shows that if the EU imposes tariffs on electric vehicles from China, the cost of buying cars for local consumers will rise significantly. Even if the EU increases production and reduces electric vehicle exports within the EU, it will not help.

In addition to the "consumer account", the EU should also calculate the "environmental account" well. The EU has repeatedly called for the world to achieve carbon peaking and carbon neutrality as soon as possible. China's electric vehicle industry not only helps China fulfill its own emission reduction commitments, but electric vehicles exported to the EU also play an important role in reducing carbon emissions in the EU. Nowadays, the EU holds high the banner of green development while wielding the big stick of protectionism. Such a "double standard" will only damage its global credibility, undermine the international community's cooperation on climate change, and hinder the global green transformation.

If tariffs are imposed on China's electric vehicles, the EU should do a good job in calculating whether this account is a loss or a gain.