As in previous disputes, China appears to be preparing a series of actions to punish the European Union (EU) for imposing tariffs on electric cars. The anti-dumping investigation into EU pork is evidence of this.
 |
| EU-China tensions are rising. (Source: Emodnet) |
The EU has increased import tariffs on Chinese electric cars by fivefold starting in July, with the additional tariffs ranging from 17.4% to 38.1% to be applied on top of the EU’s existing 10% tariff. That means Chinese-made electric cars imported into the EU face a total tariff of nearly 50%.
As for China's response, it seems that things have changed from the big trade war with the US, with heavy penalties for both sides.
This time, the target for the world's second-largest economy looks similar to what the country deployed against Australia a few years ago.
Bloomberg News has identified some of the likely targets and the areas in Europe that would be hardest hit.
Spirits from France
The first product in China’s sights is European spirits. Beijing has announced an anti-dumping investigation in January 2024. The country’s commerce ministry can also announce preliminary tariffs at any time — as it did in a similar investigation into Australian wine.
Food and agricultural products are often targeted by trade barriers. Beijing has previously targeted non-essential goods or those that can be sourced elsewhere, but China is a huge market for exporters. That means the damage to consumers in the world’s second-largest economy is low, but the impact on producers could be high.
Spirits fit the bill. Chinese consumers can always find alternatives, but the impact on France – one of the biggest backers of Europe’s electric car investigation – would be significant.
The world's second-largest economy is set to be France's second-largest export market for spirits by 2023, according to data from the International Trade Centre.
Pork: Pain in Spain
On June 17, Beijing announced an investigation into alleged pork dumping in Europe. If that leads to tariffs, the impact would be concentrated on top suppliers such as Spain — where China was the second-largest market for exporters last year — as well as Denmark and the Netherlands.
The impact on China from this investigation could be limited. Beijing can get most of its meat from domestic sources and can buy from countries like Brazil and the US if needed.
In previous disputes, the Asian country has tried to make its trade sanctions appear to comply with World Trade Organization (WTO) rules.
"It looks like this country is going down the same path," Bloomberg commented.
 |
| The Chinese Chamber of Commerce in the EU said that imported cars with large engines could be a target for Beijing's retaliation. (Source: AFP/Getty) |
Mediterranean Wine
In May 2024, a state media post mentioned wine as a product that could be targeted, along with dairy products and aircraft.
France is Europe's largest exporter of wine to China, so it could suffer, followed by Mediterranean countries.
It will be easy to find other suppliers if Beijing imposes tariffs or blocks imports from Europe. Australian wine is back on the market after China lifted tariffs in March 2024.
The global wine market is currently in a state of surplus, so the world's second-largest economy is not worried about this.
Cars: Germany "takes the hit"
Last month, the Chinese Chamber of Commerce in the EU hinted that imported cars with large engines could be a target for Beijing's retaliation.
If the tariffs were only applied to European car exporters, Germany and Slovakia would be the two countries most affected.
China lowered import tariffs on passenger cars to 15% in 2018, as part of an initial effort to ease US-China trade tensions.
Beijing has also shown a willingness to use auto tariffs as a tool in previous trade wars. The country raised tariffs on US auto imports to 40% under former President Donald Trump, before cutting them back.
Most of China’s European imports are likely to come from luxury goods makers like Porsche, Mercedes-Benz Group AG or BMW AG. Consumers in the world’s second-largest economy will have a hard time finding these goods elsewhere, but some experts say Chinese electric vehicles could be a good option.
Dairy products
Dairy products are on the list of potential tariff targets, an area where China is not heavily reliant on imports from Europe.
New Zealand supplies about half of China's milk imports, while another third comes from the (EU).
Denmark, the Netherlands, Germany and France would all be affected if Beijing were to target these products.
Aviation sector
The aviation sector has been mentioned as a possible target for China.
If China targets France-based Airbus, it will be left with Boeing. Greater reliance on an American company is probably not what Beijing wants, especially with the prospect of rising US-China tensions.
Furthermore, Boeing has had a series of safety problems, while Airbus assembles some of its planes in China.
In fact, Chinese airlines are reportedly in talks to buy more than 100 wide-body aircraft from Airbus, suggesting that aviation could be a useful carrot in any negotiations over electric car taxes — along with all of Beijing’s sticks.
Source: https://baoquocte.vn/cang-thang-trung-quoc-eu-phat-hien-cu-ca-rot-huu-ich-trong-dam-phan-bac-kinh-co-nhung-cay-gay-nao-275694.html
Comment (0)