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China’s car industry calls for 25% tariff on EU imports

China’s car industry calls for 25% tariff on EU imports

China’s car industry calls for 25% tariff on EU imports

China’s car industry calls for 25% tariff on EU imports

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  • Chinese car companies have called for import taxes of up to 25% on European Union rivals.
  • Volkswagen, Porsche, and BMW declined to comment on the discussion.
  • The Chinese government has criticized these decisions as protectionism and initiated its measures.
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According to the state media, Chinese car companies reportedly called on Beijing to impose import taxes of up to 25% on European Union rivals if the trading bloc imposes tariffs on vehicles from China. The demand allegedly arose during a closed-door meeting organized by China’s Ministry of Commerce, which also saw attendance from representatives of European car firms.

According to an article published by a social media account affiliated with state broadcaster CCTV, four Chinese and six European car companies attended the meeting in Beijing. The measures would focus on cars from the EU equipped with large petrol-driven engines, in response to the EU’s recent threat to impose tariffs of up to 38% on Chinese electric vehicle (EV) makers starting from 4 July.

German car-making giant Volkswagen confirmed to the BBC that it attended the meeting but declined to comment on the discussion. Porsche chose not to comment, and BMW did not immediately respond to inquiries from the BBC.

“China’s car companies called on the government to adopt firm countermeasures against the EU,” the report said.

“It is suggested that within the limits allowed by Word Trade Organization rules, a higher provisional tariff be imposed on large-displacement petrol vehicles imported from Europe.”

The reports echo an article published last month by the state-run newspaper Global Times, which proposed applying 25% tariffs to cars with petrol engines larger than 2.5 liters. According to Bill Russo from advisory firm Automobility, who spoke to the BBC, targeting “luxury or ultra-luxury” vehicles with such an additional tax is unlikely to impact sales volumes significantly.

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Last week, the EU’s governing European Commission (EC) announced that it had “provisionally concluded” Chinese EV manufacturers would face tariffs if discussions with Chinese authorities did not yield an effective solution. Firms that cooperated with the investigation, initiated in October, would incur an average duty of 21%, while those that did not could face tariffs as high as 38.1%. These charges would be in addition to the 10% tariff imposed on all-electric cars manufactured in China.

Following the US’s bold action of increasing its tariff on Chinese electric cars from 25% to 100% last month, the EU intervened. The Chinese government has criticized these decisions as protectionism and has retaliated by initiating measures of its own. Earlier this week, China began investigating imports of European pork products. Last month, Beijing indicated a similar action by launching investigations into imports of chemicals from the EU and US.

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