The European Commission announces tariffs on Chinese electric cars. The decision will have a ricocheting impact on the Polish automotive industry

Luc Williams

The European Commission announces temporary tariffs on Chinese electric vehicles

European Commission On June 12, she announced a temporary decision to increase customs duties on electric vehicles (BEV) produced in China and exported to the European Union. Additional duties ranging from 17.4 to 38.1 percent. are intended to remedy the unequal competition caused subsidizing electricians by the Chinese government and will be added to the existing rate of 10%. If China and the EU fail to reach an agreement, tariffs will come into effect on July 4. In the opinion of the Association of Distributors and Manufacturers of Automotive Parts SDCM, a Sino-European trade war is brewing and may hit the automotive industry in Poland.

According to Central Statistical Office data production of automotive parts and components in Poland in 2023 it was worth nearly PLN 123 billion. Information published by World's Top Exports (WTEx) shows that Poland is the 7th exporter of parts in the world, and the value of products sent to foreign markets is estimated at over USD 15 billion. This represents 3.6 percent. all global parts exports.

How will the Sino-European trade war affect the Polish automotive industry?

According to the president of SDCM and member of the board of the European Association of Automotive Parts Manufacturers CLEPA Tomasz Bębnothe EC's decision to impose higher tariffs on electric cars imported from China poses a threat retaliation from Beijing, which may result in a trade war that will have negative consequences for European parts producers, including companies operating in Poland. As he pointed out, imposing punitive tariffs on Chinese electric cars at such a critical moment as the European automotive industry finds itself may have negative consequences.

“The last thing we need is this trade war, which will also affect companies operating in Poland. This type of action is a double-edged sword and we may quickly regret this decision. We are a highly globalized industry, so unfortunately we will feel the effects of any potential changes retaliatory steps from China. If, for example, there is a breakdown in supply chains, which affects the production of European vehicle manufacturers, the Polish manufacturers supplying parts to them will lose demand for their products,” the president of SDCM told PAP.

European automotive industry facing zero-emission transformation and market challenges

As Tomasz Bęben pointed out, European automotive is undergoing the greatest transformation in history. He must switch to zero-emission driveswhich in the EU's opinion only have battery vehicles (BEV) i hydrogen (FCEV). However, their social acceptance, charging possibilities and, above all, the price reflected in limited demand are still far from desirable, which affects the condition of European producers. By Drum China they produce much cheaper and very good quality vehicles, so their sales are growing rapidly.

In the opinion of the European Commission Chinese electric vehicles are unfairly subsidized by the government in Beijingtherefore the decision was made to impose additional duties, if an agreement cannot be reached amicably with China. Earlier for the introduction punitive tariffs on Chinese vehiclesand in the amount of 100 percent, they decided United States.

Will tariffs protect the European automotive industry?

According to Tomasz Bębno, imposing customs duties on vehicles from China will not be enough protect the competitiveness of European industry and ensure just transformation in the automotive industry. “No simplification of procedures, changes to the rules of public aid and incentives for private investors established by the EU climate goals will not be achieved or it will be at the expense of the European economy and automotive industry, and therefore of entrepreneurs operating in Poland. Customs duties Unfortunately, they will not be a remedy for all the industry's ills. We may even make our situation worse very quickly – China is already announcing, albeit in a veiled manner, retaliatory measures,” he noted.

A similar opinion was expressed by Benjamin Krieger, head of CLEPA. “The European Commission is rightly concerned about the EU's competitiveness as a manufacturing center and the challenges posed by Chinese producers. However, tariffs can only provide a temporary respite and carry the risk of retaliation. Global trade requires a level playing field and may require the introduction of corrective measures. However protectionism cannot be the way to restore European competitiveness. Consolidated efforts are necessary to make the EU attractive for investments again, he stressed.

Global cooperation and investment will drive the EU's competitive advantage

As Tomasz Bęben pointed out, the Chinese automotive market accounts for one third of the global automotive industry, and many European parts manufacturers supply components and systems to both international and Chinese car manufacturers. “Even BEVs manufactured in China often contain many components and solutions provided by European companies. European parts and vehicle manufacturers are accelerating product development cycles and investing approximately EUR 70 billion annually in research and development to strengthen your competitive advantage” – added.

According to CLEPA, Europe's main challenge is not a lack of innovation potential, but high energy costs, inconsistent regulations and limited access to capital and public financing, which are increasingly leading to innovation abroad.

Author: Grzegorz Kacalski (PAP)


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