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Europe gives China a taste of its own trade medicine: Europe is using the threat of tariffs to press Chinese electric car makers to set up in the EU and share know-how. (www.politico.eu)

submitted 5 months ago by MicroWave to c/world

22 comments fedilink hide all child comments

The EU is having a radical rethink of how to cope with the trade threat from Beijing — and its response has a very Chinese flavor to it.

Over the past years, EU trade policy has traditionally focused on building protective fortress walls, and last week's decision to impose punitive tariffs on Chinese electric cars initially looked like another example of the classic defensive playbook in Brussels.

In a remarkable turn of events, however, the EU is now considering a next step that invites China's electric vehicle (EV) makers inside the walls.

The big idea is to use the tariff threat to force Chinese carmakers to come to Europe to form joint ventures and share technology with their EU counterparts, according to conversations with four diplomats and two senior officials.

There are signs the formula is already attractive with EU carmakers. Franco-American-Italian carmaker Stellantis has formed a joint venture with China's Leapmotor to start Europe operations in September. Spain's EBRO-EV has teamed up with Chery — China’s fifth-largest automotive company — to develop EVs in Barcelona.

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[–] [email protected] 8 points 5 months ago (1 children)

You're not entirely correct: China had heavily subsidized their EV industry.

The purchase incentive is gone. Many tax incentives are gone. Tax benefits for setting up factories are gone (closed ICE factories are being decommissioned rather than sold).

If you had said that in 2019, you'd be entirely correct. Today? Things are different.

[–] Senshi 1 points 5 months ago

You're correct. I got caught up in explaining the overall concept. 😅

My personal interpretation is that the Chinese companies are now feeling the competitive pressure after their golden years and are scrambling to get their products on larger markets, while said market ( better affordable EV) still promises some margins.