The European Union’s Trade Commissioner, Valdis Dombrovskis, recently stated that EU member states are expected to support imposing tariffs to counter China’s unfair trade practices. He is confident that the EU’s measures to impose tariffs on Chinese electric vehicles will take effect in November this year.
According to a report by the Financial Times, EU Trade Commissioner Valdis Dombrovskis mentioned that the 27 member states will support EU actions to assist the EU automotive industry in competing with Chinese imports of electric vehicles, which receive massive subsidies from China.
Dombrovskis stated in an interview with the Financial Times, “It is evident that member states are aware of the necessity to protect the EU automotive industry because the risk of harm is there. The market share of Chinese electric cars is growing rapidly, and these unfair subsidies exist.”
Due to concerns about potential trade retaliation from China, Germany abstained from voting to increase tariffs on Chinese electric vehicles in July. At that time, only four member states voted against, with another nine member states abstaining, and eleven member states in favor. Only if 15 countries, representing 65% of the EU population, vote against, the EU will abandon the tariff plan.
Countries like France, Italy, and Spain are firm supporters of the tariff measures. The Spanish Ministry of Economy stated that Europe must engage in self-defense measures to combat China’s unfair competition.
Chinese companies have started establishing factories in the EU to circumvent tariffs. However, Dombrovskis warned that these measures will only be effective if they comply with the rules of origin requirements.
Dombrovskis emphasized, “How much value will be created in the EU, how much proprietary technology will be transferred to the EU? Is it just an assembly plant or a car manufacturing plant? There is a significant difference.”
In June this year, the EU announced that temporary tariffs of 17.4% to 37.6% would be imposed starting from July 4th based on the subsidies received by each Chinese electric vehicle manufacturer from the Chinese government. These tariffs are in addition to the standard 10% tariff imposed by the EU on automotive imports.
Subsequently, Beijing stated that it would take “all necessary measures” to uphold its own interests. These measures may include imposing retaliatory tariffs on EU products such as brandy or pork.
Following this, Chinese Minister of Commerce Wang Wentao proposed talks with the European Commission on the matter. However, officials from both sides indicated that several rounds of negotiations focused on technical issues rather than resolving trade disputes.
EU member states are expected to vote on imposing tariffs on Chinese electric vehicles by the end of October. If approved, the proposal will officially take effect in November.
Before the EU announced imposing tariffs on Chinese electric vehicles, the United States led the way on May 14th by announcing tariffs on $18 billion worth of products imported from China, with tariffs on electric vehicles increasing from 25% to 100%, with some new rates effective from August 1st.
According to Reuters, sources revealed that the US Department of Commerce is expected to propose banning the use of Chinese software in autonomous driving and connected cars in the coming weeks.
The Biden administration is drafting a rule that would prohibit the use of Chinese software in Level 3 and above autonomous driving vehicles in the US, which means testing autonomous vehicles produced by Chinese companies on US roads will be prohibited.
The US government will also propose banning vehicles equipped with advanced wireless communication capability modules developed by China from being used on US roads.
Informants disclosed that under this proposal, car manufacturers and suppliers will need to verify the software used in their connected cars or advanced autonomous driving vehicles to ensure they are not developed by “concerning foreign entities”.
The US Department of Commerce stated last month that it plans to release proposed rules on connected vehicles in August, which are expected to impose restrictions on some software from China and other countries seen as “strategic competitors”.
In response, a spokesperson from the US Department of Commerce stated on Sunday, August 4th, that the department is “concerned about national security risks associated with connected technology in connected vehicles”.
The Department of Commerce’s Bureau of Industry and Security will issue a proposed rule that “focuses on specific concerning systems inside vehicles… the industry will also have the opportunity to review this proposed rule and submit comments”.
Last Wednesday, the White House and the State Department held a meeting with allies and industry leaders to collectively address national security risks associated with connected vehicles.
Representatives from the US, Australia, Canada, the EU, Germany, India, Japan, South Korea, Spain, and the UK participated in the meeting, exchanging views on data and network security risks associated with connected cars and certain components.
In November last year, some US lawmakers expressed concerns about Chinese companies collecting and processing sensitive data when testing autonomous driving vehicles in the US, raising questions about ten major companies including Baidu.
The US government is concerned about connected vehicles potentially using driver monitoring systems to eavesdrop or record passenger conversations or compromise the vehicle itself, posing national security risks.