China Instructs Automakers to Curb Investments in Europe Amid Tariff Dispute

China has directed its automakers to halt significant investments in European countries that have supported tariffs on Chinese electric vehicles. This decision follows new EU tariffs of up to 45.3%, impacting China-Europe relations and potentially affecting EV exports, representing over 40% of China's 2023 output.

China has urged its automakers to halt substantial investments in European nations supporting tariffs on Chinese-built electric vehicles. This instruction, leaked from an Oct. 10 meeting, responds to the European Union's newly imposed tariffs ranging up to 45.3%, straining EU-China relations.

Chinese companies were advised to pause major asset investments, such as factories, in countries backing the tariffs, including France, Poland, and Italy, and were encouraged to focus on nations opposing the levies. This strategic move is perceived as a bid for leverage in negotiations with the EU over potential tariff alternatives.

The move highlights concerns over a drop in EV exports to Europe amid existing 100% tariffs in the U.S. and Canada. Automakers are advised to engage collectively rather than in separate negotiations with European governments, following previous warnings against investments in other nations like India and Turkey.

(With inputs from agencies.)