With the tariffs aimed at creating fairer competition with Chinese electric car producers, the EU Commission has taken a step that is having an impact in China. Despite all the threats, the Commission has made it clear that it is ready to defend its own industry. Such signals are perceived as strength in China. Beijing may dislike them, but they will be respected.
Those who approach China timidly and weakly are met with tired smiles and are led around by the nose by the giant. “Their own fault,” the Chinese say – of course, never publicly. It is up to each player to decide what role they will take on in dealing with the People’s Republic.
For the moment, Beijing may be raging and fuming and might even punish German car manufacturers based there with retaliatory tariffs. For Beijing, it is also about saving face. And that is best achieved by projecting even more strength.
But this will pass. Disputes with China over the past 30 years have shown this time and again. As the second-largest economy, the country has a lot to lose. And as long as that is the case, it will find pragmatic solutions. Especially since Beijing knows very well that it has created unfair competition by all means.
The Chinese have probably been asking themselves one thing: Why didn’t the EU react similarly when the European solar industry went to the dogs due to unfair competition from China? Amelie Richter, Finn Mayer-Kuckuk, Till Hoppe and Maximilian Stascheit have compiled all the background, questions and answers about the tariffs on Chinese electric vehicles.
Additionally, we have the next round of our Top 100 China decision-makers. This time, we introduce ten representatives from think tanks.
In the tug-of-war over the introduction and level of additional tariffs on Chinese EVs, the first round went to the EU and the team around Commission President Ursula von der Leyen. Brussels has set the tariffs closer to the higher end of the range that has been discussed since the first announcement in October. The German industry and parts of the Berlin government wanted to avert the trade measure and preferred a symbolic minimal tariff.
Germany, as an export nation, greatly feared a trade conflict with China, like the one the USA has already sparked. But Germany is not alone in the EU, and other influential players like France and Spain were clearly in favor of making pure electric cars from China more expensive to import. Von der Leyen also aims to position the EU as a serious geopolitical player, which, in her view, means Brussels must show its teeth.
However, the German government now fears that Beijing will bite back. Since Scholz couldn’t prevent the tariffs, he reportedly pushed in recent weeks for the increases to be only as high as hard evidence on subsidy practices could justify. Beijing should not be challenged more than absolutely necessary.
Within the coalition, Economy Minister Robert Habeck and Finance Minister Christian Lindner reportedly had a much more positive view of the investigation. They support a tougher stance towards China than Scholz.
Lindner’s party colleague Volker Wissing, in his role as Transport Minister, openly opposed the tariffs on Wednesday. “Germany lives from trade and produces for the whole world,” Wissing told Table.Briefings. “Therefore, the EU Commission’s punitive tariffs affect German companies and their top products.” The EU should provide better conditions to produce cheaper and better cars rather than relying on protection through tariffs, which do not increase competitiveness.
Government spokesman Steffen Hebestreit expressed a similar sentiment: The German government hopes for an agreement between the EU Commission and the Chinese government. Brussels has left an option for a face-saving solution and explicitly stated its intention to seek dialogue with the Chinese government to amicably resolve market imbalances. There is an initial deadline before the preliminary implementation in early July and then a transition phase until November.
“There is still time until July 4, and it would be very desirable from our point of view to reach an amicable solution,” Hebestreit said. Germany would participate in the talks if desired, though this is currently “not foreseeable.”
The EU has tried to address concerns from various sides by setting import duties differently depending on the manufacturer to create more nuanced tariffs. Shanghai-based state enterprise SAIC, a close partner of Volkswagen, has to pay more than private company BYD, which the EU sees as having received fewer unfair aids and been more cooperative. As a result, the cost-effective market leader BYD now pays lower tariffs than Geely for cars of the Swedish brand Volvo.
Von der Leyen has thus kept her promise to align the tariffs with an attempt at objectively measuring state aid. However, this task is particularly challenging. In China’s state economy, industrial policy is practically built-in from the outset. Universities train the appropriate specialists and provide research capacities; materials and raw materials are procured cheaply – including oil and gas from Russia; skilled workers are affordable.
But most importantly: The market is so large that enormous quantities are possible. It’s also an open secret that even this market potential in the automotive industry is significantly exceeded by production capacities. The result is fierce price competition – and China would love to export the overproduction.
The EU fears catastrophic consequences for its industry, including the loss of millions of jobs. When China starts exporting goods cheaply, no one else can compete. This has been demonstrated in various industries from textiles, ships, and steel to solar cells and mobile phones.
However, the Commission’s investigation did not focus on general factors but on specific, comparatively direct subsidies, including:
These advantages mostly come not from the central government in Beijing but from cities and provinces that want to give “their” champion better chances. After the investigation, von der Leyen is sure: “The price of these cars is artificially lowered by massive state subsidies – this distorts our market.”
Therefore, the German government had little chance to avert the tariffs. The mechanisms to counter price dumping have long been established in the EU; there is at least a minimum of objectivity built in by preceding the investigation of underlying subsidies.
While the Chancellery and business associations are concerned about Chinese retaliatory measures, experts are giving a preliminary all-clear. “We assume that China will initially react calmly,” says Max Zenglein, an economist at the Mercator Institute for China Studies (Merics) in Berlin.
Zenglein expects signals to be sent to show that the tariffs will not go unanswered. These will be strategically deployed, targeting supporters of the trade measures such as Spain and France. French cognac producers, for instance, expressed particular concern on Wednesday.
China is likely to hold back against Germany’s auto industry for now, as it is a significant advocate of Chinese interests in Europe. The tariffs will be finalized in November, leaving time for China to negotiate. Beijing intends to use this time.
How high are the tariffs?
The EU Commission has decided on provisional additional tariffs on electric vehicles from Chinese production, which vary in amount. Only purely battery-powered electric vehicles are affected. The EU already imposes a ten percent tariff on Chinese electric vehicles, and the additional tariffs are on top of this ten percent.
How were the tariffs calculated?
The tariffs reflect the average amount of unfair subsidy determined by the EU’s investigation. This rate also initially applies to Tesla, which ships cars made in Shanghai to the EU. However, Tesla has requested an individual investigation, which could result in a lower tariff if it is found that Tesla received fewer subsidies.
Why do the additional duties vary?
The EU Commission determined the tariff levels based on the amount of subsidies and the cooperation of the manufacturers. SAIC received the highest rate because it received the most state aid and did not cooperate by providing its figures. The decision was, therefore, based on available facts. Manufacturers like Aiways, JAC, BMW, Chery, FAW, Changan, Dongfeng, GWM, Leapmotor, Nanjing Golden Dragon Bus, Nio, Tesla and Xpeng cooperated and were given the average rate of 21 percent. Affected manufacturers have three working days to contest the calculated tariff.
When do the tariffs take effect?
The provisional additional tariffs will be in effect from July 4. This does not mean that the tariff must be paid from this date. Companies must, however, provide a bank guarantee upon import. If the EU Commission decides on final tariffs (by Nov. 4), the provisional additional charges can be fully applied, potentially retroactively. The EU could then collect the bank guarantees. Alternatively, the Commission could impose final tariffs without retroactive effect.
What happens until Nov. 4?
The Trade Committee of the European Parliament will review the calculation and justification of the tariffs by the Commission. The tariffs will be confirmed through the comitology procedure by member states. The tariff levels and proposed duration of their application can still change until Nov. 4. During this period, discussions with China will continue, with hopes that China will consider the EU’s arguments and the tariff levels can be subsequently reduced.
What subsidies has the EU Commission identified?
The state subsidies for Chinese electric vehicle production span the entire value chain at local, provincial, and national levels. These include: undervalued lithium, special financing benefits, tax breaks, direct payments to companies, specific subsidies for individual manufacturers and common subsidies for all manufacturers.
Could Chinese manufacturers face lower tariffs than European ones?
Yes. European manufacturers producing in China and importing their products into the EU must reckon with the average rate of 21 percent – more than BYD’s 17 percent or Geely’s 20 percent. Vehicles from the SAIC-VW joint venture would also face the additional 38.1 percent, though these vehicles are not currently exported to the EU. The key factor is China as the manufacturing location, not whether the manufacturer is Chinese or European.
How will the tariffs affect customers?
This is still unclear. The crucial factor for applying additional tariffs upon import is the import date, not the purchase date. For example, if someone ordered a BYD electric car in May and it arrives six months later, the additional tariffs may apply. Whether these tariffs will be directly passed on to customers depends on the purchase contract with the dealer or manufacturer.
Are there ongoing talks with China?
The EU Commission has emphasized its desire for a joint solution with the Chinese government. However, the specifics of such a solution remain open. Beijing was reportedly not very engaged during the investigation.
How has China responded to the decision?
Beijing responded promptly, with the Chinese Foreign Ministry stating it would consider all measures to firmly defend its interests. Spokesperson Lin Jian said the EU’s special tariffs on electric cars violated market rules and were against the EU’s interests. The Chinese Chamber of Commerce in the EU expressed “shock, deep disappointment and deep dissatisfaction” over what it termed a protectionist trade measure, calling the investigation politically motivated and opaque.
What other Chinese practices is the EU Commission investigating?
The Hong Kong government announced on Wednesday that it has revoked the passports of six activists living abroad. The individuals affected include former pro-democracy legislator Nathan Law, labor unionist Mung Siu-tat and activists Simon Cheng, Finn Lau, Johnny Fok and Tony Choi. Under the National Security Law, they are accused of committing crimes that threaten national security. The activists, who are exiled in the UK, allegedly collaborated with “external forces” to tarnish Hong Kong’s reputation.
Renata Alt, chair of the Human Rights Committee in the German Bundestag (FDP), sees parallels to practices in Russia and Belarus aimed at hindering activists’ work. “It is urgently necessary for Western countries to advance their work on a modern version of Nansen passports,” Alt suggests. Nansen passports were travel documents for stateless refugees introduced in 1922 by the League of Nations High Commissioner for Refugees, Fridtjof Nansen.
Last year, the Hong Kong police offered a reward of one million Hong Kong dollars (about 119,000 euros) for information leading to the arrest of these activists, drawing sharp criticism from Western governments and human rights organizations. According to the official statement, it is now also forbidden to provide these six dissidents with funds or rent them properties. Those who support them could face up to seven years in prison. fpe
China’s weather agency has issued a warning about an extreme drought that is adversely affecting the harvest in Henan, China’s most important wheat-producing province, according to the South China Morning Post. Sixteen out of seventeen cities in the province are experiencing drought conditions, which have persisted for ten days and are expected to worsen over the coming week due to continued high temperatures.
Approximately one-third of China’s wheat production comes from Henan. Local governments in the province have been instructed to implement emergency measures. Water use in the service sector is to be limited to ensure sufficient irrigation for agriculture. Artificial rain may be employed if necessary. Available water sources are to be distributed, with priority given to household water and drinking water for livestock.
The Ministry of Agriculture issued a warning on Tuesday about high temperatures and drought in northern and central China, including the provinces of Hebei, Shanxi, Shaanxi, Henan, Shandong and Anhui. In recent months, China has mainly faced extreme weather in the form of floods, particularly affecting Guangdong, Jiangxi, and Guangxi.
As recently as March, the weather agency had predicted excellent prospects for the wheat harvest. Following this optimistic forecast, the country canceled orders for approximately 500,000 tons of wheat from the United States. jul
Xiaomi aims to double the number of its developers for driver assistance technologies to 2,000 employees by 2025. According to a report by Nikkei on Wednesday, the company plans to invest approximately 648 million dollars in the autonomous driving sector, with 207 million dollars allocated for this year alone. The number of developers is expected to increase to 1,500 by the end of this year.
Xiaomi’s current driver assistance technology corresponds to Level 2, which involves partial automation, supporting steering and acceleration. However, the driver’s hands must remain on the wheel, and their eyes must stay on the road. According to Chinese law, only cars with Level 2 technology are currently allowed on the roads. In certain areas of cities like Beijing, Shanghai, Guangzhou and Shenzhen, some selected manufacturers have been granted licenses to test Level 3 technology, which involves high automation.
The tech giant, known for its smartphones, unveiled its first electric vehicle in March. The sedan, named SU7, garnered significant attention in the competitive Chinese EV market due to its design and performance. Xiaomi received numerous orders quickly, prompting the company to raise its delivery targets for 2024. fpe
Mikko Huotari – Director of the Mercator Institute for China Studies (Merics)
Since 2020, Mikko Huotari has been the Executive Director of Merics in Berlin, making him one of Germany’s most influential China experts. Merics is the largest European think tank dedicated exclusively to modern China and frequently advises policymakers. Huotari’s research focuses on China’s political and economic development, Beijing’s foreign policy, China-Europe relations, and global (economic) governance and competition. Before becoming Executive Director, Huotari was Head of Program for Geo-Economics and International Security and later Deputy Director at Merics. In 2019, he was appointed to the German-Chinese Dialogue Forum.
Janka Oertel – Director of the Asia Program at the European Council on Foreign Relations (ECFR)
Janka Oertel is the Director of the Asia Program and a Senior Policy Fellow at ECFR, regularly engaging with policymakers. She has testified before the German Bundestag and the US Senate Foreign Relations Committee. Oertel joined ECFR after roles as a Senior Fellow in the Asia Program of the German Marshall Fund in Berlin and as Program Director at the Koerber-Stiftung. She has published extensively on EU-China and US-China relations, Indo-Pacific security, 5G, new technologies and climate cooperation.
Angela Stanzel – Researcher at the German Institute for International and Security Affairs (SWP)
Angela Stanzel conducts research for SWP on China, South Asia, Afghanistan and security and defense policy. A Sinologist with a PhD, she joined SWP in 2020. Previously, she worked with the German Marshall Fund’s Asia Program, the Körber-Stiftung, and as a Senior Policy Fellow at ECFR. In 2018-2019, she was a Senior Policy Fellow at Institut Montaigne and its representative in Germany.
Nadine Godehardt – Researcher at the German Institute for International and Security Affairs (SWP)
Nadine Godehardt has been with SWP for over a decade, focusing on China, connectivity, geopolitics and political orders. She specializes in the Belt and Road Initiative (BRI). Since 2016, she has co-edited the book series “Routledge Studies on Challenges, Crises, and Dissent in World Politics”, addressing the challenges posed by the rise of China, India, and other global South countries. Godehardt earned her PhD from the University of Hamburg in 2012 and worked at the GIGA Institute from 2008 to 2012.
Gudrun Wacker – Researcher at the German Institute for International and Security Affairs (SWP)
Gudrun Wacker has been with SWP since 2001, covering a wide range of topics including China, Taiwan, East Asia, the Indo-Pacific, EU-China relations, US-China relations and East Asia’s regional security architecture. She has been the EU’s representative in the ASEAN Regional Forum Expert and Eminent Persons group since 2018. Prior to SWP, she worked at the Federal Institute for Eastern and International Studies in Cologne and at the University of Tuebingen.
Josie-Marie Perkuhn – Researcher at the University of Trier
Josie-Marie Perkuhn leads the Taiwan as a Pioneer (TAP) postdoctoral project at the University of Trier. She focuses on China and Taiwan’s domestic and foreign policies, innovation policies, China’s 21st-century foreign policy role, and its international integration and cooperation behavior. She has also worked as a Taiwan Fellow at National Chengchi University in Taipei and conducted research at Tsinghua University in Beijing.
Mareike Ohlberg – Author and China researcher specializing in Chinese foreign, media and digital policy
Mareike Ohlberg is a Senior Fellow in the Asia Program of the Global Marshall Fund and co-leads the Stockholm China Forum. She co-authored “Silent Conquest” which highlights China’s influence on Germany and other democracies. Ohlberg, who previously worked at Merics, focuses on Chinese foreign policy and developments in Hong Kong and Taiwan.
Alexander Gabuyev – Director of the Carnegie Russia Eurasia Center
Alexander Gabujew heads the Carnegie Russia Eurasia Center, leading a team of analysts who were formerly part of the Carnegie Moscow Center, which was closed by the Kremlin in 2022. His research focuses on Russian foreign policy, the Ukraine war and China-Russia relations.
Katja Drinhausen – Head of Domestic Policy and Society at the Mercator Institute for China Studies (Merics)
Katja Drinhausen specializes in China’s legal system, human rights situation and the Communist Party’s communication strategies. As the head of the China Spektrum project, she aims to represent the diversity of debates within China for the European public, focusing on the everyday lives of Chinese citizens. Drinhausen spent part of her childhood in Taiwan and lived in China until 2018.
Max Zenglein – Chief Economist at the Mercator Institute for China Studies (Merics)
Max Zenglein examines China’s macroeconomic development, trade relations and industrial policy, as well as economic developments in Hong Kong and Taiwan. Before joining Merics, he spent ten years as an economic analyst at AHK in Shenzhen and Beijing. Zenglein holds a PhD in political economy with a focus on China and has studied at the University of New York in Buffalo, the Hochschule für Wirtschaft und Recht in Berlin, the University of Hong Kong, and the University of Kassel.
Nina Maidel has been Project Manager Structure Planning & Electric Powertrain China at BMW Brilliance since April. Maidel has been working for BMW for more than nine years, most recently she was jointly responsible for e-mobility factory planning in Munich. Her new location is Shenyang in Liaoning Province.
Eric Breumier has been promoted from Chief Executive Officer to Head of Greater China at Ferring. The Swiss pharmaceutical company based in Saint-Prex develops and markets peptide-based drugs. Breumier will remain based in Shanghai.
Is something changing in your organization? Let us know at heads@table.media!
Green bananas are becoming a popular gift for stressed office workers in China. The reason: The Chinese word for “anxiety” 焦虑 (jiāolǜ) sounds similar to “green banana” 绿蕉 (lǜjiāo), but with the tones reversed. Corresponding fruit baskets can be found at convenience stores, often labeled with the inscription “don’t worry” 禁止焦虑 (jìnzhǐ jiāolǜ). On social media platforms like Weibo, especially young people seek ways to cope with the burnout of their demanding work lives. The slow ripening of the bananas on their desks is described by many as “relaxing” and “anxiety-reducing”.
With the tariffs aimed at creating fairer competition with Chinese electric car producers, the EU Commission has taken a step that is having an impact in China. Despite all the threats, the Commission has made it clear that it is ready to defend its own industry. Such signals are perceived as strength in China. Beijing may dislike them, but they will be respected.
Those who approach China timidly and weakly are met with tired smiles and are led around by the nose by the giant. “Their own fault,” the Chinese say – of course, never publicly. It is up to each player to decide what role they will take on in dealing with the People’s Republic.
For the moment, Beijing may be raging and fuming and might even punish German car manufacturers based there with retaliatory tariffs. For Beijing, it is also about saving face. And that is best achieved by projecting even more strength.
But this will pass. Disputes with China over the past 30 years have shown this time and again. As the second-largest economy, the country has a lot to lose. And as long as that is the case, it will find pragmatic solutions. Especially since Beijing knows very well that it has created unfair competition by all means.
The Chinese have probably been asking themselves one thing: Why didn’t the EU react similarly when the European solar industry went to the dogs due to unfair competition from China? Amelie Richter, Finn Mayer-Kuckuk, Till Hoppe and Maximilian Stascheit have compiled all the background, questions and answers about the tariffs on Chinese electric vehicles.
Additionally, we have the next round of our Top 100 China decision-makers. This time, we introduce ten representatives from think tanks.
In the tug-of-war over the introduction and level of additional tariffs on Chinese EVs, the first round went to the EU and the team around Commission President Ursula von der Leyen. Brussels has set the tariffs closer to the higher end of the range that has been discussed since the first announcement in October. The German industry and parts of the Berlin government wanted to avert the trade measure and preferred a symbolic minimal tariff.
Germany, as an export nation, greatly feared a trade conflict with China, like the one the USA has already sparked. But Germany is not alone in the EU, and other influential players like France and Spain were clearly in favor of making pure electric cars from China more expensive to import. Von der Leyen also aims to position the EU as a serious geopolitical player, which, in her view, means Brussels must show its teeth.
However, the German government now fears that Beijing will bite back. Since Scholz couldn’t prevent the tariffs, he reportedly pushed in recent weeks for the increases to be only as high as hard evidence on subsidy practices could justify. Beijing should not be challenged more than absolutely necessary.
Within the coalition, Economy Minister Robert Habeck and Finance Minister Christian Lindner reportedly had a much more positive view of the investigation. They support a tougher stance towards China than Scholz.
Lindner’s party colleague Volker Wissing, in his role as Transport Minister, openly opposed the tariffs on Wednesday. “Germany lives from trade and produces for the whole world,” Wissing told Table.Briefings. “Therefore, the EU Commission’s punitive tariffs affect German companies and their top products.” The EU should provide better conditions to produce cheaper and better cars rather than relying on protection through tariffs, which do not increase competitiveness.
Government spokesman Steffen Hebestreit expressed a similar sentiment: The German government hopes for an agreement between the EU Commission and the Chinese government. Brussels has left an option for a face-saving solution and explicitly stated its intention to seek dialogue with the Chinese government to amicably resolve market imbalances. There is an initial deadline before the preliminary implementation in early July and then a transition phase until November.
“There is still time until July 4, and it would be very desirable from our point of view to reach an amicable solution,” Hebestreit said. Germany would participate in the talks if desired, though this is currently “not foreseeable.”
The EU has tried to address concerns from various sides by setting import duties differently depending on the manufacturer to create more nuanced tariffs. Shanghai-based state enterprise SAIC, a close partner of Volkswagen, has to pay more than private company BYD, which the EU sees as having received fewer unfair aids and been more cooperative. As a result, the cost-effective market leader BYD now pays lower tariffs than Geely for cars of the Swedish brand Volvo.
Von der Leyen has thus kept her promise to align the tariffs with an attempt at objectively measuring state aid. However, this task is particularly challenging. In China’s state economy, industrial policy is practically built-in from the outset. Universities train the appropriate specialists and provide research capacities; materials and raw materials are procured cheaply – including oil and gas from Russia; skilled workers are affordable.
But most importantly: The market is so large that enormous quantities are possible. It’s also an open secret that even this market potential in the automotive industry is significantly exceeded by production capacities. The result is fierce price competition – and China would love to export the overproduction.
The EU fears catastrophic consequences for its industry, including the loss of millions of jobs. When China starts exporting goods cheaply, no one else can compete. This has been demonstrated in various industries from textiles, ships, and steel to solar cells and mobile phones.
However, the Commission’s investigation did not focus on general factors but on specific, comparatively direct subsidies, including:
These advantages mostly come not from the central government in Beijing but from cities and provinces that want to give “their” champion better chances. After the investigation, von der Leyen is sure: “The price of these cars is artificially lowered by massive state subsidies – this distorts our market.”
Therefore, the German government had little chance to avert the tariffs. The mechanisms to counter price dumping have long been established in the EU; there is at least a minimum of objectivity built in by preceding the investigation of underlying subsidies.
While the Chancellery and business associations are concerned about Chinese retaliatory measures, experts are giving a preliminary all-clear. “We assume that China will initially react calmly,” says Max Zenglein, an economist at the Mercator Institute for China Studies (Merics) in Berlin.
Zenglein expects signals to be sent to show that the tariffs will not go unanswered. These will be strategically deployed, targeting supporters of the trade measures such as Spain and France. French cognac producers, for instance, expressed particular concern on Wednesday.
China is likely to hold back against Germany’s auto industry for now, as it is a significant advocate of Chinese interests in Europe. The tariffs will be finalized in November, leaving time for China to negotiate. Beijing intends to use this time.
How high are the tariffs?
The EU Commission has decided on provisional additional tariffs on electric vehicles from Chinese production, which vary in amount. Only purely battery-powered electric vehicles are affected. The EU already imposes a ten percent tariff on Chinese electric vehicles, and the additional tariffs are on top of this ten percent.
How were the tariffs calculated?
The tariffs reflect the average amount of unfair subsidy determined by the EU’s investigation. This rate also initially applies to Tesla, which ships cars made in Shanghai to the EU. However, Tesla has requested an individual investigation, which could result in a lower tariff if it is found that Tesla received fewer subsidies.
Why do the additional duties vary?
The EU Commission determined the tariff levels based on the amount of subsidies and the cooperation of the manufacturers. SAIC received the highest rate because it received the most state aid and did not cooperate by providing its figures. The decision was, therefore, based on available facts. Manufacturers like Aiways, JAC, BMW, Chery, FAW, Changan, Dongfeng, GWM, Leapmotor, Nanjing Golden Dragon Bus, Nio, Tesla and Xpeng cooperated and were given the average rate of 21 percent. Affected manufacturers have three working days to contest the calculated tariff.
When do the tariffs take effect?
The provisional additional tariffs will be in effect from July 4. This does not mean that the tariff must be paid from this date. Companies must, however, provide a bank guarantee upon import. If the EU Commission decides on final tariffs (by Nov. 4), the provisional additional charges can be fully applied, potentially retroactively. The EU could then collect the bank guarantees. Alternatively, the Commission could impose final tariffs without retroactive effect.
What happens until Nov. 4?
The Trade Committee of the European Parliament will review the calculation and justification of the tariffs by the Commission. The tariffs will be confirmed through the comitology procedure by member states. The tariff levels and proposed duration of their application can still change until Nov. 4. During this period, discussions with China will continue, with hopes that China will consider the EU’s arguments and the tariff levels can be subsequently reduced.
What subsidies has the EU Commission identified?
The state subsidies for Chinese electric vehicle production span the entire value chain at local, provincial, and national levels. These include: undervalued lithium, special financing benefits, tax breaks, direct payments to companies, specific subsidies for individual manufacturers and common subsidies for all manufacturers.
Could Chinese manufacturers face lower tariffs than European ones?
Yes. European manufacturers producing in China and importing their products into the EU must reckon with the average rate of 21 percent – more than BYD’s 17 percent or Geely’s 20 percent. Vehicles from the SAIC-VW joint venture would also face the additional 38.1 percent, though these vehicles are not currently exported to the EU. The key factor is China as the manufacturing location, not whether the manufacturer is Chinese or European.
How will the tariffs affect customers?
This is still unclear. The crucial factor for applying additional tariffs upon import is the import date, not the purchase date. For example, if someone ordered a BYD electric car in May and it arrives six months later, the additional tariffs may apply. Whether these tariffs will be directly passed on to customers depends on the purchase contract with the dealer or manufacturer.
Are there ongoing talks with China?
The EU Commission has emphasized its desire for a joint solution with the Chinese government. However, the specifics of such a solution remain open. Beijing was reportedly not very engaged during the investigation.
How has China responded to the decision?
Beijing responded promptly, with the Chinese Foreign Ministry stating it would consider all measures to firmly defend its interests. Spokesperson Lin Jian said the EU’s special tariffs on electric cars violated market rules and were against the EU’s interests. The Chinese Chamber of Commerce in the EU expressed “shock, deep disappointment and deep dissatisfaction” over what it termed a protectionist trade measure, calling the investigation politically motivated and opaque.
What other Chinese practices is the EU Commission investigating?
The Hong Kong government announced on Wednesday that it has revoked the passports of six activists living abroad. The individuals affected include former pro-democracy legislator Nathan Law, labor unionist Mung Siu-tat and activists Simon Cheng, Finn Lau, Johnny Fok and Tony Choi. Under the National Security Law, they are accused of committing crimes that threaten national security. The activists, who are exiled in the UK, allegedly collaborated with “external forces” to tarnish Hong Kong’s reputation.
Renata Alt, chair of the Human Rights Committee in the German Bundestag (FDP), sees parallels to practices in Russia and Belarus aimed at hindering activists’ work. “It is urgently necessary for Western countries to advance their work on a modern version of Nansen passports,” Alt suggests. Nansen passports were travel documents for stateless refugees introduced in 1922 by the League of Nations High Commissioner for Refugees, Fridtjof Nansen.
Last year, the Hong Kong police offered a reward of one million Hong Kong dollars (about 119,000 euros) for information leading to the arrest of these activists, drawing sharp criticism from Western governments and human rights organizations. According to the official statement, it is now also forbidden to provide these six dissidents with funds or rent them properties. Those who support them could face up to seven years in prison. fpe
China’s weather agency has issued a warning about an extreme drought that is adversely affecting the harvest in Henan, China’s most important wheat-producing province, according to the South China Morning Post. Sixteen out of seventeen cities in the province are experiencing drought conditions, which have persisted for ten days and are expected to worsen over the coming week due to continued high temperatures.
Approximately one-third of China’s wheat production comes from Henan. Local governments in the province have been instructed to implement emergency measures. Water use in the service sector is to be limited to ensure sufficient irrigation for agriculture. Artificial rain may be employed if necessary. Available water sources are to be distributed, with priority given to household water and drinking water for livestock.
The Ministry of Agriculture issued a warning on Tuesday about high temperatures and drought in northern and central China, including the provinces of Hebei, Shanxi, Shaanxi, Henan, Shandong and Anhui. In recent months, China has mainly faced extreme weather in the form of floods, particularly affecting Guangdong, Jiangxi, and Guangxi.
As recently as March, the weather agency had predicted excellent prospects for the wheat harvest. Following this optimistic forecast, the country canceled orders for approximately 500,000 tons of wheat from the United States. jul
Xiaomi aims to double the number of its developers for driver assistance technologies to 2,000 employees by 2025. According to a report by Nikkei on Wednesday, the company plans to invest approximately 648 million dollars in the autonomous driving sector, with 207 million dollars allocated for this year alone. The number of developers is expected to increase to 1,500 by the end of this year.
Xiaomi’s current driver assistance technology corresponds to Level 2, which involves partial automation, supporting steering and acceleration. However, the driver’s hands must remain on the wheel, and their eyes must stay on the road. According to Chinese law, only cars with Level 2 technology are currently allowed on the roads. In certain areas of cities like Beijing, Shanghai, Guangzhou and Shenzhen, some selected manufacturers have been granted licenses to test Level 3 technology, which involves high automation.
The tech giant, known for its smartphones, unveiled its first electric vehicle in March. The sedan, named SU7, garnered significant attention in the competitive Chinese EV market due to its design and performance. Xiaomi received numerous orders quickly, prompting the company to raise its delivery targets for 2024. fpe
Mikko Huotari – Director of the Mercator Institute for China Studies (Merics)
Since 2020, Mikko Huotari has been the Executive Director of Merics in Berlin, making him one of Germany’s most influential China experts. Merics is the largest European think tank dedicated exclusively to modern China and frequently advises policymakers. Huotari’s research focuses on China’s political and economic development, Beijing’s foreign policy, China-Europe relations, and global (economic) governance and competition. Before becoming Executive Director, Huotari was Head of Program for Geo-Economics and International Security and later Deputy Director at Merics. In 2019, he was appointed to the German-Chinese Dialogue Forum.
Janka Oertel – Director of the Asia Program at the European Council on Foreign Relations (ECFR)
Janka Oertel is the Director of the Asia Program and a Senior Policy Fellow at ECFR, regularly engaging with policymakers. She has testified before the German Bundestag and the US Senate Foreign Relations Committee. Oertel joined ECFR after roles as a Senior Fellow in the Asia Program of the German Marshall Fund in Berlin and as Program Director at the Koerber-Stiftung. She has published extensively on EU-China and US-China relations, Indo-Pacific security, 5G, new technologies and climate cooperation.
Angela Stanzel – Researcher at the German Institute for International and Security Affairs (SWP)
Angela Stanzel conducts research for SWP on China, South Asia, Afghanistan and security and defense policy. A Sinologist with a PhD, she joined SWP in 2020. Previously, she worked with the German Marshall Fund’s Asia Program, the Körber-Stiftung, and as a Senior Policy Fellow at ECFR. In 2018-2019, she was a Senior Policy Fellow at Institut Montaigne and its representative in Germany.
Nadine Godehardt – Researcher at the German Institute for International and Security Affairs (SWP)
Nadine Godehardt has been with SWP for over a decade, focusing on China, connectivity, geopolitics and political orders. She specializes in the Belt and Road Initiative (BRI). Since 2016, she has co-edited the book series “Routledge Studies on Challenges, Crises, and Dissent in World Politics”, addressing the challenges posed by the rise of China, India, and other global South countries. Godehardt earned her PhD from the University of Hamburg in 2012 and worked at the GIGA Institute from 2008 to 2012.
Gudrun Wacker – Researcher at the German Institute for International and Security Affairs (SWP)
Gudrun Wacker has been with SWP since 2001, covering a wide range of topics including China, Taiwan, East Asia, the Indo-Pacific, EU-China relations, US-China relations and East Asia’s regional security architecture. She has been the EU’s representative in the ASEAN Regional Forum Expert and Eminent Persons group since 2018. Prior to SWP, she worked at the Federal Institute for Eastern and International Studies in Cologne and at the University of Tuebingen.
Josie-Marie Perkuhn – Researcher at the University of Trier
Josie-Marie Perkuhn leads the Taiwan as a Pioneer (TAP) postdoctoral project at the University of Trier. She focuses on China and Taiwan’s domestic and foreign policies, innovation policies, China’s 21st-century foreign policy role, and its international integration and cooperation behavior. She has also worked as a Taiwan Fellow at National Chengchi University in Taipei and conducted research at Tsinghua University in Beijing.
Mareike Ohlberg – Author and China researcher specializing in Chinese foreign, media and digital policy
Mareike Ohlberg is a Senior Fellow in the Asia Program of the Global Marshall Fund and co-leads the Stockholm China Forum. She co-authored “Silent Conquest” which highlights China’s influence on Germany and other democracies. Ohlberg, who previously worked at Merics, focuses on Chinese foreign policy and developments in Hong Kong and Taiwan.
Alexander Gabuyev – Director of the Carnegie Russia Eurasia Center
Alexander Gabujew heads the Carnegie Russia Eurasia Center, leading a team of analysts who were formerly part of the Carnegie Moscow Center, which was closed by the Kremlin in 2022. His research focuses on Russian foreign policy, the Ukraine war and China-Russia relations.
Katja Drinhausen – Head of Domestic Policy and Society at the Mercator Institute for China Studies (Merics)
Katja Drinhausen specializes in China’s legal system, human rights situation and the Communist Party’s communication strategies. As the head of the China Spektrum project, she aims to represent the diversity of debates within China for the European public, focusing on the everyday lives of Chinese citizens. Drinhausen spent part of her childhood in Taiwan and lived in China until 2018.
Max Zenglein – Chief Economist at the Mercator Institute for China Studies (Merics)
Max Zenglein examines China’s macroeconomic development, trade relations and industrial policy, as well as economic developments in Hong Kong and Taiwan. Before joining Merics, he spent ten years as an economic analyst at AHK in Shenzhen and Beijing. Zenglein holds a PhD in political economy with a focus on China and has studied at the University of New York in Buffalo, the Hochschule für Wirtschaft und Recht in Berlin, the University of Hong Kong, and the University of Kassel.
Nina Maidel has been Project Manager Structure Planning & Electric Powertrain China at BMW Brilliance since April. Maidel has been working for BMW for more than nine years, most recently she was jointly responsible for e-mobility factory planning in Munich. Her new location is Shenyang in Liaoning Province.
Eric Breumier has been promoted from Chief Executive Officer to Head of Greater China at Ferring. The Swiss pharmaceutical company based in Saint-Prex develops and markets peptide-based drugs. Breumier will remain based in Shanghai.
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Green bananas are becoming a popular gift for stressed office workers in China. The reason: The Chinese word for “anxiety” 焦虑 (jiāolǜ) sounds similar to “green banana” 绿蕉 (lǜjiāo), but with the tones reversed. Corresponding fruit baskets can be found at convenience stores, often labeled with the inscription “don’t worry” 禁止焦虑 (jìnzhǐ jiāolǜ). On social media platforms like Weibo, especially young people seek ways to cope with the burnout of their demanding work lives. The slow ripening of the bananas on their desks is described by many as “relaxing” and “anxiety-reducing”.