He The United Kingdom distances itself from European tariffs: The government of this country, which is not part of the EU after Brexit, has assured that it will not impose higher taxes on electric cars imported from China. At least in principle.
This measure is to protect its local market and not so much its exports, against possible retaliation. But there is a second interpretation: the United Kingdom could become the Gateway to Europe from Chinaimporting Chinese cars to the mainland at lower tariffs.
“The decision you make has to be the right one for the sector“
The UK Trade Secretary, Jonathan Reynolds, has spoken out: he points out that They are not willing to follow the path of Europe and the US by imposing tariffs on electric cars. from China. The European ones, still provisional, are set at 47.6% as the maximum, while previously the US imposed them at 100%.
Reynolds admits to having discussed this measure with his European counterparts, which he considers risky. “I don’t rule anything out, but If you have a very export-oriented industry, the decision you make has to be the right one for that sector.“said the trade representative of Keir Starmer’s Labour government According to Europa Press.
Let us remember that this increase in tariffs is a protectionist measure for European industry, considering that the People’s Republic’s zero-emissions are “artificially cheap” due to government subsidies. But it could also be counterproductive.
Gateway to Europe for cars imported from China? If the UK does not impose trade barriers on electric cars imported from the People’s Republic, it could become the solution to “skip” European tariffs.
To cars manufactured in British plantsand exported to Europe, they are given a rate of 10%. If Chinese firms The cars are sent in kit form and assembled in the UK.could import them to the continent by applying this much lower rate.
This is already being done. For example, DR Automobiles is using this strategy, doing the same with its cars from Chinese partners such as Chinese brands Chery, BAIC or JAC. The Spanish company EBRO is also doing this in the Zona Franca, at least in its first phase. Although it remains to be seen how Europe responds to this “trap”.
In any case, the UK’s move is more about protecting its market: a good chunk of zero-emissions cars sold in the UK are imported from China by firms such as Tesla, MG (owned by SAIC) and BMW. Higher taxes would increase their price, although there are brands that are containing them for the moment.
And it is that The islands are not so dependent on exports to China: Most of the cars sold outside their borders are destined for Europe. Of the 700,000 cars it exported in 2023, Only 7% were destined for China (about 49,000 models)Meanwhile, more than 60% of cars manufactured on British soil were shipped to EU countries, According to data from the Society of Motor Manufacturers and Traders (SMMT).
Europe divided over tariffs on Chinese cars. It should be noted that tariffs on electric cars imported from China do not only affect companies in the People’s Republic: Brands such as BMW, Volkswagen, Daimler (Mercedes-Benz) and Tesla manufacture some of their zero-emission vehicles in China. Which means that they are also taxed by these border taxes.
This keeps Europe divided depending on how the measure affects them. According to Reutersin a recent non-binding vote Twelve member states voted in favour, four against and 11 abstained.France, Italy and Spain supported the tariffs, while Germany, Finland and Sweden abstained.
Germany is one of those that has the most to lose for the reasons mentioned above, but also because of the possible retaliation that China might adopt if the tariffs were finally applied. In fact, they have already threatened to apply 25% taxes on high-capacity gasoline arriving from Europe to the People’s Republic, which affects brands such as BMW and Audi.
But Germany is also heavily dependent on China for its exports: last year, one third of the cars designed in its factories and shipped abroad were destined for the People’s Republic.
Since tariffs are not final, the reduction of tariffs on European brands that produce in China is being considered They are called “competing companies” and are subject to a 20.8% rate (for example, Tesla). There are models such as the CUPRA Tavascan or the electric MINI to which the highest rate is applied (37.8%) as they were not included in the investigation.
In any case, Europe, or more precisely the member states, will decide by November at the latest on the application and final amounts. However, revoking them, despite the division of positions, will be complicated. A qualified majority would be needed (at least 15 countries representing 65% of the European population voting against).
Source: www.motorpasion.com
