The European Union is not able to come to a unanimous decision on the benefits of EU tariffs on the import of China-built electric cars. The European Union has long been discussing the application of tariffs on Chinese cars, and at this point, they aren't able to reach a joint vote. Here is how the situation looks:
About the Policy
The European Commission, responsible for the EU's trade policy, has imposed provisional tariffs of up to 37.6% on electric vehicles imported from China. This measure aims to counteract what the Commission claims are unfair subsidies. These tariffs would affect not only Chinese manufacturers like BYD but also Western automakers, such as Tesla and BMW, that produce cars in China.
The Vote
An advisory vote among EU member states was conducted to gather their perspectives on the issue. According to sources, a dozen EU members voted in support of the tariffs, four voted against them, and 11 abstained. The Commission is anticipated to consider this feedback when determining whether to implement definitive duties in what has become the EU's most high-profile trade case to date.
Possible Outcome
The Commission will investigate this affair for 3 months. Should the Commission recommend duties after completing its investigation, they will be subject to a binding vote by EU members. The duties will be enacted unless a qualified majority of 15 member states, representing 65% of the EU's population, opposes them. If the pattern of the advisory vote is mirrored in the final vote, the definitive duties, generally effective for five years, will be implemented.
Member States' Views
The large number of countries abstaining from the vote shows that even though they support the Commission's arguments about a level playing field for trade, they are wary of a trade war with China. This becomes an even more likely scenario as China has warned that there will be a wide-ranging retaliation.
German car manufacturers, who derived a third of their sales from China last year, have called on the EU to abandon the proposed tariffs. This might be because some companies like BMW manufacture in China.
According to government sources, France, Spain, and Italy are among the countries that have supported the tariffs, while Germany, Sweden, and Finland abstained.
The German vote to abstain is anticipated in the spirit of "critical solidarity" with the Commission. On the other hand, Finland doubts the decision is in favour of the EU's interests. Swedish Trade Minister Johan Forssell emphasised the importance of dialogue between the Commission and China to reach a solution.
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