While other parts of the world have already imposed higher tariffs on imported Chinese EVs, the European Union continues to explore alternatives – even though it did raise tariffs on certain imports from that country in late October. Those tariffs do vary based on the manufacturer and are based on fears that companies like BYD are well on their way to taking over the global automotive industry, though certain automakers have also lobbied against them. Meanwhile, discussions between the European Union and China continue, but it seems as if those talks remain at an impasse.
According to Bloomberg, the EU hasn’t made much progress in its talks with Chinese officials in regard to discovering an alternative to increased tariffs, nor does that type of agreement seem likely at this point – at least, not any time soon. Both sides admit that they’ve made some progress and talks will continue, but sources noted that “the chances of a deal remain slim for now,” even as Chinese officials have explored the idea of implementing counter tariffs on European imports.
To date, the two sides have been exploring a potential agreement on what’s known as price undertakings, which are complex mechanisms used to control prices and the volume of exports, which could be used to help China avoid tariffs. At the same time, the EU and China are trying to avoid cross-compensation – where minimum import prices on EVs would be offset by the sales of other goods – while the EU is keen to explore individual agreements with companies such as European firms that have joint ventures with Chinese entities, something that China isn’t thrilled about.
In the meantime, both the U.S. and Canada have implemented 100 percent tariffs on imported Chinese EVs, which halted BYD’s plans to enter the latter country recently. Many government officials – not to mention auto executives like Ford CEO Jim Farley – see cheap Chinese EVs as an existential threat to the business, which is largely what’s driving these actions.
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