"China may take action increasing the temporary tariff rate on imported cars"

On Tuesday evening (21st) local time, the European Union China Chamber of Commerce issued a statement on the X official account saying that it had learned from internal sources that China may consider increasing the temporary tariff rate on imported cars with large-displacement engines.

The statement pointed out that this potential move will have an impact on both European and American automakers, especially considering the background of the recent US and European attacks on Chinese electric vehicles. Hong Kong media "South China Morning Post" reported on the 22nd that this "countermeasures" measure will counter the trade action taken by Europe and the United States against Chinese electric vehicles.

According to Hong Kong media, Liu Bin, the chief expert of the China Automotive Technology Research Center and deputy director of the China Automotive Strategy and Policy Research Center, disclosed the relevant content in an interview. The Chinese Chamber of Commerce in the European Union also quoted its statement as saying that according to WTO rules, China's temporary tariff rate on imported gasoline cars and SUVs with engine displacement greater than 2.5L can be considered to be increased to 25%.

Liu Bin stressed that the adjustment proposal reflects China's determination to pursue the goal of "double carbon" and accelerate green development, is in line with WTO rules and market economy principles, and is "fundamentally different from the protectionist measures taken by some countries and regions".

According to reports, in 2023, China will import about 250,000 cars with engine displacement greater than 2.5L, accounting for 32% of the total imported cars. Imported large-displacement engine cars also account for 80% of China's large-displacement engine car consumption. If the temporary tariff rate is increased, it will have a significant impact on cars imported from the European Union, and it will also affect cars imported from the United States.

The South China Morning Post mentioned that this statement came at a time when trade relations between China and Western powers were in tension. Last week, despite China's strong opposition, the Biden administration announced the imposition of high tariffs on several Chinese products exported to the United States, especially the increase in import tariffs on Chinese electric vehicles to 100%. This has also triggered concerns in many countries such as Germany and Sweden.

On the 21st local time, when U.S. Treasury Secretary Yellen visited Frankfurt, Germany, she tried to win over the EU to jointly deal with China's so-called "overcapacity." It alarmistly claims that the United States and Western allies must respond to China's growing manufacturing power "in a united manner", otherwise their industries will be in danger.

She also justified the new U.S. tariffs in her speech, saying that the United States has no intention to implement anti-China policies, that China's "overcapacity" may "threaten the survival of factories around the world," and that the U.S. tariff increase is a "strategic and targeted move.".

Yellen met with bank executives during a visit to Frankfurt and will attend a meeting of G7 finance ministers in Italy later this week

However, the EU seems to be less active in this olive branch extended by the United States. According to the Financial Times, later that day, European Commission President von der Leyen said at a campaign debate in Brussels that the EU would not follow the United States in imposing tariffs on China and that the EU would adopt a "package of tariffs" different from Washington's The approach requires "tailor-made" tariffs on China.

According to the Wall Street Journal, she hinted in her speech that any tariffs ultimately imposed by the EU would be lower than the 100% tariffs imposed by the United States on Chinese electric vehicles last week.

The Financial Times stated that with less than a month left before the European Parliament elections, Von der Leyen is seeking re-election as President of the European Commission. She "downplayed" the possibility of a trade war with China at the debate, playing with words, "I don't think we are fighting a trade war. My proposition is 'risk DE-risking rather than decoupling.' It is obvious that we are engaging in a trade war with China." 'DE-risking'.

The New York Times reported on the 21st that German officials are cautious about taking harsh measures because it may lead to China shutting out German automakers such as BMW and Volkswagen. German Chancellor Scholz said in a speech last week, "We should not forget that European manufacturers, as well as some American manufacturers, have achieved success in the Chinese market and have also sold a large number of cars produced in Europe to China."

At the same press conference, Swedish Prime Minister Ulf Kristersson also said that "it is a bad idea to start dismantling global trade."

Regarding the U.S. government’s imposition of additional tariffs on China, Chinese Foreign Ministry spokesperson Wang Wenbin said on the 15th that the U.S. continues to politicize economic and trade issues and further increases tariffs on China. This is compounding mistakes and will only significantly increase the cost of imported goods and make the U.S. Businesses and consumers will bear more losses, resulting in greater costs for American consumers. According to Moody's estimates, U.S. consumers bear 92% of the cost of additional tariffs on China, with U.S. households spending an additional $1,300 a year. The U.S.'s protectionist measures will also cause greater damage to the security and stability of the global supply chain. We have noticed that many European politicians have said that imposing additional tariffs is a bad strategy that will undermine global trade. We urge the United States to earnestly abide by WTO rules and immediately cancel the additional tariffs imposed on China. China will take all necessary measures to defend its rights and interests.