Chinese Automakers Urge Retaliatory Tariffs on European Cars

Chinese automakers are pressuring Beijing to increase tariffs on European gasoline cars in response to the EU's restrictions on Chinese electric vehicle exports. The move comes amid rising protectionist trade policies from the EU, aimed at controlling the influx of cheap Chinese goods.

Chinese automakers have urged Beijing to hike tariffs on imported European gasoline-powered cars in retaliation for Brussels' curbs on Chinese EV exports, the state-backed Global Times newspaper said on Wednesday.

In a closed-door meeting on Tuesday also attended by European car companies, China's auto industry "called on the government to adopt firm countermeasures (and) suggested that positive consideration be given to raising the provisional tariff on gasoline cars with large-displacement engines," according to the report. The meeting, organised by China's Ministry of Commerce, was held in Beijing and attended by SAIC, BYD , BMW , Volkswagen, and Porsche , two people with direct knowledge of the matter said.

The main aim of the meeting was to put pressure on Europe and lobby against the tariffs, they added. EU trade policy is turning increasingly protective amid concerns that China's production-focused, debt-driven development model could see the 27-member bloc flooded with cheap goods, including electric vehicles, as Chinese firms look to boost sales overseas due to weak demand at home.

The European Commission's June 12 announcement that it would impose anti-subsidy duties of up to 38.1% on imported Chinese EVs from July followed a move by the United States to hike tariffs on Chinese cars in May, and opens a new front in the West's trade war with Beijing. The Global Times first reported late last month that a Chinese government-affiliated auto research centre was suggesting China raise its import tariffs on imported gasoline sedans and sport utility vehicles with engines larger than 2.5 litres to 25%, from the current rate of 15%.

Chinese authorities have previously hinted at possible retaliatory measures through state media commentaries and interviews with industry figures. The same newspaper last month also hinted that Chinese companies planned to ask authorities to open an anti-dumping investigation into European pork products, which China's commerce ministry on Monday announced it would undertake.

It has also urged Beijing to look into EU dairy imports. BIG CARS ARE BIG BUSINESS

EU car exports to China were worth 19.4 billion euros ($20.8 billion) in 2023, while the bloc bought 9.7 billion euros of electric vehicles from China, according to EU statistics agency figures. China accounts for about

30% of German carmakers ' sales, and Germany is by far the largest exporter of vehicles with engines of 2.5 litres or above, having shipped $1.2 billion worth to China since the beginning of this year, Chinese customs data shows.

Slovakia is China's fourth-largest and the EU's second-biggest provider of cars with large engines. This year it has exported $803 million worth of sport utility vehicles. The United States, the United Kingdom and Japan all also export large numbers of cars with engines bigger than 2.5 liters, and would presumably stand to benefit most from the proposed tariff increase.

($1 = 0.9314 euros) (Additonal reporting by Ella Cao, Albee Zhang and Bernard Orr; Editing by Kim Coghill and Jamie Freed)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)