Spain breaks EU ranks with sudden call to drop China EV tariffs

THE European Union should re-examine its plan to impose additional tariffs on Chinese-made electric vehicles (EV), Spanish Prime Minister Pedro Sanchez said during a visit to the Asian nation, underlining simmering EU divisions over the trade measure.  

“I have to be blunt and frank with you that we need to reconsider – all of us, not only member states but also the European Commission – our position towards this movement,” Sanchez said on Wednesday (Sep 11) in Kunshan, China.

This came after a four-day trip in which he met with Chinese President Xi Jinping. 

The Spanish premier’s comments raise the prospect that national leaders could try to muster enough support to block the European Commission’s effort to impose drastic restrictions on Chinese EV imports.

Such a move would represent a dramatic reversal for EU trade chiefs in Brussels and their supporters such as French President Emmanuel Macron, who have been calling for urgent action to prevent European manufacturers being overwhelmed by state-subsidised competition from China.

If a qualified majority of member states – 15 countries representing at least 65 per cent of the EU’s population – does not block the measures in a binding vote, the European Commission will publish a final regulation on the tariffs by Oct 30. 

The duties would then remain in effect for five years.

China and the EU have been locked in a trade dispute after Brussels decided to increase tariffs, which will be imposed in November, on Chinese-made EVs, saying that Chinese companies unfairly benefit from state subsidies and are flooding Europe with excess production.

In response, Beijing launched anti-dumping investigations into EU exports of brandy, dairy and pork products. 

The EU plans to hit SAIC Motor, Geely and BYD with duties of 36.3 per cent, 19.3 per cent and 17 per cent, respectively. 

This is on top of the 10 per cent tariff that exporters from China are already subject to.

 Tesla would face an additional rate of just below 8 per cent, plus the base duty. 

Spain, as Europe’s largest pork exporter, is particularly affected by the possibility of a trade war.

The country is also the EU’s second-largest car manufacturer and is seeking to attract investments from China to develop its EV industry – part of the reason behind Sanchez’s visit. 

Ref: Spain breaks EU ranks with sudden call to drop China EV tariffs (businesstimes)