Introduction

The Ministry of Commerce of China has expressed strong protest against the European Union's decision to impose tariffs as high as 36.3% on Chinese electric vehicles. The Ministry issued a statement stating that the EU's move is very wrong and constitutes an unfair and unreasonable act of protectionism.

Chinese electric vehicle brands are thriving in foreign markets, especially in Europe, where they hold a significant market share. However, the upcoming tariff measures may have a direct impact on Chinese companies.

The rapid rise and market share capture of Chinese electric vehicle brands in overseas markets, becoming leading enterprises, are not without reason.

Therefore, in such circumstances, the EU is willing to impose high tariff policies on Chinese electric vehicle companies, which may even make the trade relations between China and Europe less friendly.

The rise of Chinese electric vehicle brands.

According to statistics, Chinese electric vehicles have already occupied an 8% market share in the European market, which has put a lot of pressure on European traditional car manufacturers and has led them into a state of collective anxiety.

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This is because Chinese electric vehicle brands are developing very rapidly and are selling their brand electric vehicles in the European market, with advantages that other car manufacturers find hard to match.

It is clear that Chinese electric vehicle brands not only have a very high cost-performance ratio but also have very high specifications and ultra-long endurance capabilities, which give them a significant advantage over European local car manufacturers.

Therefore, Chinese brand electric vehicles can occupy such a large share in the European market and continue to increase, which European local car manufacturers are very aware of.However, Germany, one of the major traditional automobile manufacturing countries, opposes Finance Minister Maribel's proposal this time.

Germany is the largest automobile manufacturing country among EU countries, and the automotive industry is one of Germany's important pillar industries. For a long time in the past, Germany's electric vehicle market has lagged behind other countries and regions. In recent years, Germany has actively sought cooperation with China to seek common development.

However, some changes have occurred. In June this year, German Chancellor Scholz personally announced the cessation of cooperation with Chinese automobile manufacturing enterprises.

The passage of this proposal may exacerbate the rift between the United States and the European Union, so the original proposal did not involve clauses against Chinese automobile manufacturing enterprises.

The "Fit for 55" bill will not involve clauses on Chinese-made electric vehicles, but the United States believes that the automotive industry is one of Europe's largest trade deficits.

The United States also feels threatened in the field of electric vehicles and hopes that Europe will join in trade protection against Chinese electric vehicles. After listening to the opinions of the United States, the European Commission finally decided to add this clause to the "Fit for 55" bill, imposing a 36.3% tariff.

However, many members of the German parliament are dissatisfied with the attitude of the European Commission, so German Chancellor Scholz made changes to China's policy to protect the German automotive industry.

But France will not stand idly by, as they hold an advantageous position in electric vehicle manufacturing. Therefore, French members of parliament oppose this proposal.

Because the increase in this tariff will damage the interests of French and European Union automobile manufacturers, and may also lead to the gradual loss of Europe's leading position in electric vehicles, which may even lead to the decline of the French automotive industry.China to Increase Tariffs on Large Displacement Cars

China's electric vehicle (EV) brands have suffered significant setbacks in the European market, causing substantial economic losses for domestic EV companies. This could potentially lead to China imposing additional tariffs on large displacement cars imported from European Union (EU) countries.

However, the biggest winner in this scenario is the United States. The government is using this tariff policy to strengthen alliances and create more development opportunities for the American manufacturing industry.

As a result, European car manufacturers may turn to China to purchase a large number of electric vehicles. At the same time, many EU-based car manufacturers are also preparing to establish factories in China to mitigate the impact of tariffs.

There are significant developments on the part of China's EV companies as well. Some brands are considering building their own factories in the European market to avoid potential high tariffs in the future.

This not only increases the market share of China's automotive industry but also reduces the impact of tariffs on Chinese brand electric vehicles.

However, establishing factories in Europe is not an easy task. The cost of building factories and the issue of technology transfer will become obstacles for Chinese EV companies.

Domestic factories can enjoy preferential policies in China, such as tax and land fees, but it is difficult to enjoy such benefits when building factories in Europe.Moreover, local automobile manufacturers in EU countries may also prevent our country's enterprises from establishing factories locally, and may even adopt some hostile actions to hinder the development of our country's enterprises there.

Both sides may seek a compromise solution.

Therefore, in this situation, our country's electric vehicle companies will face great challenges if they want to build factories locally, which may even lead to a relaxation of policies for the other party to build factories in our country, especially in Germany.

This EU proposal will result in all cars exported by our country to EU countries having to pay a tariff of 36.3%, which will cause huge economic losses to our country's electric vehicle companies.

It will further cause Chinese brand electric vehicles to lose competitiveness in the European market, which will inevitably affect the development of our country's automotive industry, and even the development of our country's entire economy.

As our country's electric vehicle brands gradually go global and occupy a significant share in overseas markets, especially leading in the European market, it will undoubtedly impact the automotive industry of European countries.

As our country's electric vehicle market has grown from nothing to small, and now leads globally, it has great development potential from this perspective.

It may even replace the automotive industry of EU countries in the future, especially German cars.

Germany itself places great importance on its performance in the automotive sector, especially among EU countries, and as a major car manufacturer, Germany's update and upgrade of old production lines will also be very slow.

This will affect Germany's market share and may even lead to the decline of the domestic automotive industry.Germany, as a traditional powerhouse in automobile manufacturing, faces skepticism from electric vehicle manufacturers in other EU countries towards its own car manufacturers.

On one hand, Germany wants to introduce the technological advancements of Chinese electric vehicle manufacturers, while on the other hand, it fears that this could harm the interests of domestic car manufacturers, ultimately leading to a decrease in its own market share.

Under such circumstances, Germany may gradually incorporate some compromise solutions into EU proposals and may even engage in negotiations and consultations with our country.

Conclusion

The economic relationship between China and Europe is very close, and both sides have a significant dependency on trade with each other.

If the trade relationship between China and Europe were to become less close, it would affect the economic relationship between the two sides and could even have a certain impact on the global economy.

Therefore, both China and Europe will seek a compromise solution in tariff policies to avoid a full-blown trade war.