The European Union's (EU) punitive tariffs on Chinese battery electric vehicles (EVs) are a shortsighted mistake that will do more harm than good and will trigger multiple negative effects on the global auto market, the Brussels-based economic think tank Bruegel said on Wednesday.
The European Commission announced on Oct 4 that it passed a vote to impose punitive tariffs on Chinese EVs, sparking criticism from several European countries and auto industries who warn the move could boomerang against the EU's competitiveness.
Uri Dadush, a researcher with the institute, said in his article published Wednesday that the additional tariff "overstates the problem and will do more harm than good", and will ultimately backfire on the European auto industry.
The article quoted industry insiders as saying that many of the Chinese EVs are produced in joint ventures with EU and US automakers, and the price and quality advantages reflect the advantages of China's related industries in economies of scale, labor costs, battery technology and materials, as well as the full competition and first-mover advantage among Chinese manufacturers.
Dadush said that the high price of EVs in Europe hurts all consumers, especially those with low incomes. Once the EU imposes tariffs on Chinese EVs, many EU citizens, especially those in rural areas, who are willing to make their cars more green and environmentally friendly will find it difficult to achieve their wishes.
The tariff will have also three negative long-term effects, according to Dadush.
First, it may lead to countermeasures from China. China has brought relevant anti-subsidy measures to the WTO dispute settlement mechanism, and the EU may lose the case, as the reasons for the European Commission's request for high tariffs are untenable, and this conclusion has long been a consensus in the industry.
Second, the imposition of tariffs will weaken the motivation of EU electric vehicle manufacturers to cut costs and continue to innovate, as EU automakers still need to compete in China and other fast-growing markets, and the prospect of them gradually falling behind is real.
Third, such decision marks a trade split and further "decoupling" between the Western world and China, leaning to more economic costs uncertainties. "It's not too late for the EU to change its mind," said Dadush in the article.
EU's punitive tariffs on Chinese EVs do more harm than good: think tank
EU's punitive tariffs on Chinese EVs do more harm than good: think tank
EU's punitive tariffs on Chinese EVs do more harm than good: think tank
China is willing to work with South Korea to promote a sound and stable development of their strategic cooperative partnership, Chinese Foreign Minister Wang Yi said Tuesday.
Wang, also a member of the Political Bureau of the Communist Party of China Central Committee, made the remarks in a phone call with South Korean Foreign Minister Cho Tae-yul.
Noting that China and South Korea are friendly neighbors and important cooperative partners, Wang said that with the joint efforts of both sides, China-South Korea relations have recently shown a momentum of improvement and development, which serves the interests of the two peoples.
China is ready to work with South Korea to uphold the original intention of establishing diplomatic ties, and adhere to the direction of good neighborliness and friendship, Wang said.
Following the principle of mutual benefit and win-win cooperation, China is also willing to continue to make good use of bilateral dialogue and cooperation mechanisms in various fields, strengthen interactions at all levels and people-to-people exchanges, and enhance mutual understanding and trust with South Korea, he added.
China has taken note of recent changes in the domestic situation in South Korea, Wang said, adding that China adheres to the principle of non-interference in internal affairs and believes that South Korean people have the wisdom and ability to properly handle domestic issues.
Despite the rise of protectionism and unilateralism, trade between China and South Korea continues to expand, with the interests of the two countries further converging, which shows that bilateral economic and trade cooperation has a solid foundation and broad space, Wang said.
Welcoming South Korean companies to further explore the Chinese market and expand investment in China, he said China is ready to strengthen coordination with South Korea to jointly maintain the stability and smooth flow of global industrial and supply chains.
Cho, for his part, said that South Korea cherishes the current sound momentum of bilateral relations and remains unchanged in its position of promoting the sustainable development of the South Korea-China strategic cooperative partnership.
South Korea is willing to strengthen strategic communication with China, increase high-level exchanges and communication at all levels, and take more measures to facilitate personnel exchanges between the two countries, Cho said.
He said that South Korea is satisfied with the continuous expansion of bilateral economic and trade cooperation, and looks forward to creating more mutually beneficial outcomes and injecting more momentum into the well-being of the two peoples.
The two sides agreed that China-Japan-South Korea cooperation is conducive to the respective development of the three countries and regional peace, stability and prosperity, vowing to work together to strengthen trilateral cooperation.
The two sides exchanged views on cooperation under multilateral frameworks such as APEC. China supports South Korea in hosting the APEC Economic Leaders' Meeting next year, for which South Korea appreciates and looks forward to enhancing communication and coordination with China.
The two sides also talked about the situation on the Korean Peninsula. Wang stressed that China always advocates resolving the Peninsula issue through dialogue and consultation and will continue to play a constructive role in promoting peace and stability on the peninsula.
China to promote sound, stable development of strategic cooperative partnership with South Korea: FM
