Mobility Portal, Spain
Date: May 21, 2024
Just like with cognac: French measures in dispute for foreign EVs are a bitter sip to swallow for China
By Lucía Colaluce
French flag

Just like with cognac: French measures in dispute for foreign EVs are a bitter sip to swallow for China

The EU, "the most open place in the world," seeks to apply tariffs and protectionist measures to the import of EVs from China. How will this decision affect both countries?
France and China's strained relatioship

The European Union (EU) is characterized by its members as “outwardly flexible“, yet it cannot avoid deploying protectionist provisions against China.

On May 13, Emmanuel Macron, President of France, met at the Palace of Versailles with Bloomberg News, to discuss his meeting with Xi Jinping, President of the People’s Republic of China, and Ursula von der Leyen, President of the European Commission, and their latent conflict.

Macron asserts: “The European Union is the most open place in the world.”

“But you can’t survive if at the same time, there are subsidies and excess capacity in China, and protectionism somewhere in the market, and the Inflation Reduction Law and the American Purchase Law in the United States,” he adds.

Emmanuel Macron, Xi Jinping and Ursula von der Leyen’s meeting.

The truth is that this dispute extends beyond the territory of electric vehicles (EVs), inherently affecting Asians.

Xi Jinping threatened French authorities with imposing measures on one of their major economic pillars: cognac.

“When there are ten per cent tariffs for Chinese electric cars entering our markets, and when taxes between 15 and 24 per cent are paid when entering the Chinese market, there is a problem,” explains the French leader.

The region in Western Europe is rooted in the production of this alcoholic beverage, with data from the Bureau National Interprofessionnel du Cognac (BNIC) showing that 32 million bottles were exported to China in 2023.

“If we are weak, if we are threatened by the fact that retaliatory measures can be taken, we simply don’t do what we have to do,” the French President indicates.

“We had this discussion and that’s why they decided not to implement the first measures on cognac and withdraw the first”, Macron concludes about the meeting between the powers.

In spite of the efforts, Europe is deeply immersed in imports of electric cars from the Asian giant.

In fact, a report from the European Automobile Manufacturers’ Association (ACEA) indicates that in 2022, the EU imported over half a million cars manufactured in China, of which around 63 per cent were battery-electric cars.

ACEA data.

Additionally, it has the presence of zero-emission automobile corporations such as BYD, the world’s largest manufacturer so far, MG, and Chery Group.

Later in the dialogue, Macron determines: “We want to be sure that in terms of tariffs, subsidies, and production rules, we have fair competition.”

It is right to initiate investigations, examine the situation in detail, and review it,” he adds.

Emmanuel Macron’s interview in the Versailles Palace.

This statement is due to the fact that on March 5, von der Leyen issued a statement announcing the implementation of a new registration regulation for the import of new EVs carrying up to nine passengers from the People’s Republic of China.

“In all the different sectors, what we want is simply reciprocity. We want – and indeed, more than that, and regarding the relationship with China – a level playing field,” justifies the European leader.

Furthermore, he adds: “This is a necessity, not because we are protectionist, but simply because we want to protect our region.”

What’s truly striking is that the European Commission has initiated an investigation into possible unfair practices in the Chinese automotive market, which includes foreign brands manufactured in the country, such as Tesla, Renault, and BMW.

European manufacturers have expressed concern about encouraging protectionist competition.

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