Europe to Impose Additional Tariffs up to 25% on Cars Produced in China Starting July 2024
The threat has loomed for months and is on the verge of becoming a reality. According to the Financial Times, the European Commission will inform manufacturers of the strengthening of tariffs on vehicles imported from China.
According to American counterparts, pending European confirmation expected this Wednesday, tariffs could reach up to 25%. This change is set to be implemented as early as July 2024.
The reason behind this decision? Europe believes that China is giving an unfair advantage to its manufacturers through subsidies. With these aids, despite the large investments required for electric vehicles, Chinese brands can offer electric cars at unbeatable prices in European markets. This gives them a competitive edge over European companies that are struggling to keep up with this price war. The Old Continent is following the footsteps of the United States, which quadrupled this tax back in May.
With these reinforced tariffs, the prices of Chinese cars are expected to increase. However, some argue that this may not significantly impact Chinese manufacturers, as they have already advanced and can further reduce prices before tariffs take effect.
If Europe aims to support its manufacturers, several companies, particularly in Germany, have not endorsed the idea. This measure is expected to escalate the trade war between Europe and China. Germans are concerned about potential retaliatory measures from Beijing. Additionally, European brands established in China are facing challenges as local customers increasingly prefer domestic brands.
It is also worth noting that this measure will affect cars made in China but sold by European brands, such as the Dacia Spring or Volvo EX30.