Earlier this month, there were reports that EU tariffs will further worsen their trade relations with China, and one of the first signs is here.
The retaliation in question is advise to Chinese car manufacturers to pause major investments in European Union countries that are pro-tariffs.
Reuters reported that this will likely divide China and other parts of Europe since these Chinese EV tariffs can be as high as 45.3%, a decision that also diverged EU nations. Currently, ten EU countries support the tariffs, including Italy, France, and Poland. However, nations like Germany strongly opposed the vote. Only twelve abstained from voting.
Companies advised by China are BYD, Geely, and SAIC. While there is no termination on operations yet, they were urged to delay major investments, like building factories. Chinese automakers were also told to be cautious about investing in countries that abstained and were encouraged to prioritize investments in countries that opposed tariffs.
These set of guidance aligns with Bejing's approach to protect its national interests, especially the booming EV market, per VCPost.
Chinese Automakers in Pro-Tariff Countries
Pausing investments in countries like Italy and France will be a huge blow to their automotive industries as they have been actively seeking top Chinese EV makers in their country to protect the industry from other cheap EVs.
In a report by Al Jazeera, SAIC has already been planning an EV factory and parts center in France, while other Chinese brands are currently in talks with Italy. BYD is already establishing a plant in Hungary, which opposed the tariffs, and may move their European headquarters to the area to reduce costs.
Generally, these companies are already cautious when it comes to building independent manufacturing sites in Europe since it can be demanding in terms of local regulations. Besides EU countries, Chinese EV makers also received caution regarding investments in India and Turkey.
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