In the midst of the escalating struggle between the West and China over the dumping of electric cars, a moment when the European and American automotive strategies seem to be drifting apart while Europe appears to be hindering the United States, it is giving China an opportunity. With China’s worsening economic decline and the Communist Party’s shaky reign as underground discontent continues to grow in Chinese society, the EU countries, instead of standing by the US, are potentially allowing China to exploit the situation and continue its malevolent existence.
At the end of May, as the German Chancellor visited Beijing and clinked glasses with Chinese leaders and Xi Jinping visited Europe shaking hands with Macron, a noticeable shift in attitude towards China has been observed, especially from the EU, particularly Germany and France. According to Reuters on May 29th, the European Commission’s decision on taxing Chinese electric cars will now be postponed until after the European Parliament elections which end on June 9th. The new temporary tariff announcement is scheduled for June 10th. Sources cited technical document issues arising at the last minute as the reason for the delay.
A spokesman for the European Commission told Politico that no decisions have been made regarding tariffs at the moment, but the decision might be announced within a week after the European Parliament elections. This decision-making period would be just before the EU Commission President Ursula von der Leyen and leaders from Germany, France, and Italy attend the G7 summit together.
Given China’s massive subsidies to electric cars, artificially low prices, and harm to European manufacturers, the EU initiated an anti-subsidy investigation against Chinese electric cars in October last year. By sampling, the EU Commission determined that the investigation would target BYD, SAIC Motor, and Geely. The legal deadline for applying temporary measures such as tariffs or quota restrictions on Chinese electric cars by the EU is set for July 4th, nine months after the start of the anti-subsidy investigation by the EU Commission.
The decision to tax Chinese electric cars by the European Commission has been postponed until after the European Parliament elections on June 9th. Why is this the case? Is the EU waiting to see the stance of the new European Parliament members on this issue or want to consider the opinions of European Parliament members before deciding on taxing Chinese electric cars? Or is the hope to gain more support from the new blood in the European Parliament and hence the delay in making this crucial decision?
The German magazine “Der Spiegel” was the first to report on the EU’s plan to delay the tariff decision announcement. The purpose of this delay, as reported by Der Spiegel, is to “prevent the issue from affecting the elections.” Why shouldn’t the issue allow European Parliament members and the public to fully understand it so that Europeans can decide their representatives based on their stance towards Chinese electric cars? Letting the issue affect the elections is the essence of why elections need and must have a genuine public opinion basis.
In response to the latest policy of the United States imposing a 100% special tariff on Chinese electric cars, German media has surprisingly condemned this move as “trade protectionism during the US election period.” However, there are completely different views on how the EU should respond to the issue.
According to Deutsche Welle Chinese, the Rheinische Post in Düsseldorf published a commentary titled “A Destructive Tariff Race,” pointing out, “While a tariff race may benefit a few in the short term, it is harmful to everyone in the long run. Protectionism will only create more losers in the end.” it is important to understand that even if U.S. tariffs benefit a “minority” in the short term, they are certainly disadvantageous to China and beneficial in the long run for all Americans, especially the basic industries of the U.S. society – the automotive industry and millions of automotive workers. America’s retaliatory measures against China’s predatory and aggressive dumping, or rather preemptive ambush, will protect the country’s foundational industries, and the only loser in this war will be China.
The author of the Rheinische Post article, Ms. Antje Höning, actually views the retaliation against malicious dumping and protection of legitimate businesses as “sacrificing the opportunity for other companies to obtain cheap raw materials and consumers to buy inexpensive Chinese cars,” which is truly perplexing. According to her logic, no government in the world can implement “anti-dumping” practices because all anti-dumping policies will “sacrifice” the opportunity for consumers to buy affordable products. When Ms. Antje Höning of the Rheinische Post points out that retaliatory EU tariffs could “easily lead to China retaliating by blocking German luxury cars,” she seems to forget that this is a method that may be harmful to a few in the short term but would benefit everyone in the long run.
Regarding the significant increase in tariffs by the United States on Chinese products, an article in the Swiss newspaper “Neue Zürcher Zeitung” actually calls for “the EU not to follow the United States.” While recognizing that “China has indeed supported its own companies through direct subsidies,” the article encourages EU countries not to follow the US and instead impede US actions, allowing China’s cheap products to freely enter the European and American markets!
On May 28th this year, Great Wall Motors Germany Ltd. held an all-staff meeting to announce the closure of its European headquarters in Munich, which had been operational for just two and a half years, terminating all employment contracts by August 31st and suspending expansion plans. Great Wall Motors becomes the first Chinese new energy car company to close its European headquarters. It is reported that the Western head of Great Wall Motors Europe, Steffen Cost, has been dismissed, and the European operations will be transferred to the Chinese headquarters. The European parts warehouse of Great Wall Motors has been relocated from Nuremberg, Germany, to Amsterdam in the Netherlands.
Great Wall Motors stated that the closure of the European headquarters is due to the slowdown of the Chinese electric vehicle market in Europe, especially in Germany. Great Wall’s ambitious plans to enter new markets in Europe have been put on hold. Two years ago, Great Wall Motors reached a cooperation agreement with Europe’s largest automotive distributor group, Emil Frey, to distribute its Ora and Wey vehicles. However, two years later, Great Wall Motors failed to achieve expansion goals in Europe, having sold only 6,300 cars last year and 1,621 cars in Europe in the first four months of this year.
Great Wall’s retreat from Europe is a result of the EU preparing to impose tariffs on Chinese cars. The EU’s anti-subsidy investigation into Chinese electric cars will lead to tariff increases, creating high uncertainty for Great Wall Motors. Initially planned for June 5th, the EU’s announcement of temporary tariffs on Chinese electric cars is expected to shockingly increase compared to the original tariff levels. This aligned effort between the EU and the US in resisting China’s dumping practices is producing initial results, and further actions are likely to eliminate China’s penetration into the traditional car markets of Europe and America.
Europeans should be aware that the EU delaying the implementation of tariffs on Chinese electric cars, amid efforts to prevent China’s expansion and bypass American sanctions, would provide China with a breathing room. China’s close cooperation with Hungary, leveraging the country’s newly discovered rich lithium deposits to set up large-scale battery production lines as a base for China’s electric car battery industry, and establishing electric car factories in Hungary to invade the EU market from East to West. Hungary for the EU is akin to Mexico for the US and Canada. The revelation of China’s dual offensive invading the US and EU markets is clear.
Why is there a divergence in the automotive strategy between Europe and the US? Why is the EU constantly hindering the US? EU countries have grown too close to the Chinese Communist Party, aligning closely with Communist ideologies, with many politicians focusing solely on their immediate interests, forgetting the threat of communism and the true mission of a free democratic society, which may be the fundamental reason behind these trends.