Is the EU making a misstep with its new tariffs on Chinese electric vehicles (EVs)? According to a recent Bloomberg opinion piece, the answer might be yes!
On Friday, Bloomberg highlighted concerns over the EU's decision to slap tariffs of up to 45% on Chinese EVs. The piece warned that this move could backfire big time, undermining the EU's own decarbonization goals, reducing competitive pressure on homegrown companies, and stifling innovation and productivity.
The editorial suggested that instead of prompting positive change, the tariffs might spark more trade barriers and a reliance on state aid, leading down a path toward \"an industrial policy that is already failing.\" 😬
But wait, there's more! The article pointed out that these protectionist tools are being overused, potentially harming the EU's commitment to free trade. Other investigations are also revving up, including probes into Chinese wind turbine suppliers and public procurement.
Supporters of the tariffs argue they'll encourage Chinese carmakers to build capacity in Europe. However, Bloomberg notes it's not that simple. Building distribution and service networks takes time, and despite rising imports of China-made EVs since 2020, Chinese brands still only account for about 8% of new battery EV sales in Europe.
Meanwhile, European automakers aren't exactly cruising smoothly. They still need access to China’s booming market but face challenges like high costs, sluggish innovation, regulatory hurdles, and fragmented capital markets.
So, what's the bottom line? The EU's tariff strategy might just accelerate tensions without giving European automakers the boost they need. Maybe it's time for a pit stop to rethink this approach? 🤔🚘
Reference(s):
Bloomberg editorial: EU's tariff policy on Chinese EVs is a misstep
cgtn.com
