Putting tariffs on Chinese EVs is not the solution to trade impasse: former UN Under-Secretary-General

Imposing tariffs on Chinese electric vehicles (EVs) because they are better than European cars is absolutely the wrong solution to the current trade conflict between Europe and China, said Erik Solheim, former UN Under-Secretary-General.

The European Commission, the executive arm of the 27-nation EU, announced on October 29 that it had concluded its anti-subsidy investigation and decided to impose a definitive countervailing duty on imports of new battery EVs from China for a period of five years.

Solheim, who now serves as the co-chair of the Europe-Asia Center, said in an interview with China Media Group (CMG), that both sides should sit down and talk to find a solution to the current impasse.

"Absolutely putting tariffs on Chinese electric cars because they are superior, they're better than European cars, that's exactly the wrong solution. Protectionism - that’s a race to the bottom. So Europe and China should go into a dialogue to make sure that there is happiness on both sides. One solution can be China investing more and partnering more with European companies so that we can have more jobs in Europe. China should help making sure that European companies can be successful in the Chinese market, that's for sure. We should avoid tariffs when China now is the superior nation in basically all green production," said Solheim.

Solheim said imposing tariffs on imported Chinese EVs would hamper the EV industry in Europe, which relies heavily on Chinese components.

"I hope the European Union and China can find solutions to this, because I think deep down everyone accepts that trade barrier is the wrong thing. I still hope that tariffs on Chinese electric cars can be avoided. And look, also the European electric vehicles are running with Chinese batteries, so even a European vehicle with a Chinese battery is half Chinese. So we are so integrated. We should work together and find solutions which are win-win solutions, creating jobs both in Europe and in China - that will be much better for everyone," he said.

Putting tariffs on Chinese EVs is not the solution to trade impasse: former UN Under-Secretary-General

The U.S. Federal Reserve on Thursday slashed interest rates by 25 basis points amid cooling inflation and a weakening labor market, marking the second rate cut in this easing cycle.

Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee's two percent objective but remains somewhat elevated, the Federal Open Market Committee (FOMC), the central bank's policy-setting body, said in a statement.

In support of its goals, the Committee decided to lower the target range for the federal funds rate by 0.25 percentage point to 4.5 percent to 4.75 percent, the statement said.

The Fed's latest decision came after a weak employment report, which showed that U.S. employers added only 12,000 jobs in October, amid a cooling labor market. This slowdown was exacerbated by a strike and the impact of recent hurricanes.

The latest report also revised down employment for August and September, to a gain of 78,000 and a gain of 223,000, respectively. With these revisions, employment in the two months combined is 112,000 lower than previously reported.

After its Sept. 17-18 meeting, the central bank slashed the target range for the federal funds rate by 50 basis points, which marked the first rate cut in over four years and signaled the start of an easing cycle.

U.S. Fed slashes interest rates by 25 basis points amid weakening labor market