Tue October 8, 2024 â–ª
3
min reading â–ª acc
Escalating trade tensions between the European Union and China over tariffs on electric cars threaten to shake economies around the world. While Brussels voted for these measures, Beijing is preparing its response, leaving the shadow of targeted reprisals hanging over the European countries most favorable to the decision.
European tariff advocates in the crosshairs
The EU’s recent decision to impose tariffs on Chinese electric vehicles has sent shockwaves through the international business world. Of the 27 member states, 10 voted for, 5 against and 12 abstained.
China, which wasted no time in reacting, has already threatened targeted repression, particularly on European brandy, pork and dairy products.
The European, especially the German, automotive industry is in a delicate situation. Although Germany voted against these tariffs, the first victims of the Chinese reaction could be luxury brands such as Audi, Porsche or Lamborghini.
Oliver Blume, CEO of Volkswagen, also expressed his concerns about the potential impact on the German car industry.
European industries vulnerable to China’s response
China has a wide range of options to respond and target key sectors of the European economy. The first victim could be the pork industry, which is already the subject of an anti-dumping investigation. Spain, Denmark and the Netherlands, the EU’s main suppliers, risk the worst consequences.
The dairy sector is not left out, particularly exposed Netherlands, France and Ireland.
Faced with this tense situation, the EU and China continue to negotiate, in particular exploring the possibility of a mechanism to control export prices and volumes as an alternative to tariffs.
However, experts remain pessimistic about the outcome of these talks. Henry Gao, a professor at Singapore Management University, believes that “ the probability of reaching an agreement is relatively low” and does not rule out a strong response from China if the negotiations fail.
This trade conflict between the EU and China will undoubtedly have repercussions far beyond their borders and affect the global economy as a whole.
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