According to CCTV News, on July 4th local time, the European Commission announced that it will officially impose a temporary countervailing duty on pure electric vehicles imported from China starting from July 5th, with a maximum tax rate of 37.6%.

But the temporary tariffs that came into effect on July 5th do not mean that pure electric vehicle manufacturers from China need to pay the tariffs immediately. Prior to the final determination of tariffs by the European ｕｎｉｏｎ on November 4th, companies only need to provide bank guarantees to ensure traceability after the final tariffs are decided by the European Commission. The final decision to impose additional taxes still depends on the outcome of subsequent negotiations between China and Europe. There is still a 4-month window until the final decision.

This move has also sparked significant disagreements and extensive discussions within the European ｕｎｉｏｎ.

Suppressing opponents, exposing the lagging competitiveness of the EU industry

Chinese Ministry of Commerce spokesperson He Yadong stated at a regular press conference on July 4th that China hopes the EU will move in the same direction as China on this issue and avoid anti subsidy measures that harm the mutually beneficial cooperation and common development of the China EU automotive industry. He also emphasized that he hopes the European side will seriously listen to the voices within the alliance and engage in rational and pragmatic consultations with the Chinese side.

Insiders within the EU have expressed that the EU's resort to trade protectionism to suppress competitors is undoubtedly a reflection of its backward industry competitiveness.

Hungarian Minister of Economy Nagi Marton recently stated in an interview with CCTV reporters that the Hungarian government firmly supports free trade and strongly opposes the EU's imposition of tariffs on electric vehicles from China.

Nagi Marton, Minister of Economy of Hungary: The Hungarian government's position is very clear. We strongly oppose the imposition of tariffs because it means protectionism, not free competition. We know that free competition and globalization are conducive to economic development, and any form of trade war between countries will bring huge burdens to economic development. We oppose a trade war. If one side starts imposing tariffs, it is very natural and normal for the other side to take countermeasures. This will not bring any benefits.

Specifically, the EU plans to impose tariffs ranging from 17.4% to 37.6% on different Chinese car companies based on factors such as their level of cooperation. Najib believes that the EU's practice of implementing differentiated tax rates for specific enterprises is contrary to convention, lacks factual and legal basis, and is a foolish act.

Nagi Marton, Minister of Economy of Hungary: I am an economist, but I have never heard of imposing different tariffs on different car models and companies, such as BYD, SAIC Group, ｏｒ Geely. I think this is very foolish because the two sides are not in an equal relationship. Tariffs targeting specific manufacturers are simply a joke.

The rotating presidency of the European ｕｎｉｏｎ will focus on improving the competitiveness of the European economy

Starting from July 1st, Hungary will assume the rotating presidency of the European ｕｎｉｏｎ for a period of six months, and during its term, it will explicitly prioritize improving the competitiveness of the European economy.

Nagi Marton, Minister of Economy of Hungary: To be honest, I believe that those wielding the tariff baton are often the ones who are lagging behind due to their technological weakness and competitive gap. As is well known, the competitiveness of the European ｕｎｉｏｎ has fallen behind and its advantages have disappeared in the past few years. The automotive industry is in urgent need of enhancing competitiveness. We believe that the transition between electric vehicles and new energy is the trend.

The problem of declining competitiveness in Europe has accumulated and is difficult to reverse. Against the backdrop of major countries such as China and the United States continuously investing in upgrading their industries, the European ｕｎｉｏｎ has invested heavily in supporting Ukraine.

Hungarian Minister of Economy Nagi Marton: Billions of euros are not used for economic development, but for funding wars, which is a huge problem. In the European ｕｎｉｏｎ, we have returned to the standard set by the Maastricht Treaty, which means that the fiscal deficit should not exceed 3% of the gross domestic product. Without money, what can we use to support digital transformation, new energy vehicles, and green transformation. At the same time, we also need to fund wars and defense industries. This irreconcilable state, I would ｃａｌｌ it fiscal expenditure conflict ｏｒ fiscal incompetence.

Protectionist measures such as increasing tariffs cannot help EU companies enhance their global competitiveness.

Hungarian Minister of Economy Nagi Marton: I would prefer the EU to adopt a subsidy strategy, subsidize the electric vehicle industry, support free competition, rather than setting tariff barriers to protect the internal market, which is a drag on the transformation of electric vehicles. In this way, the transformation will not be achieved so quickly.

In late June, on the eve of assuming the rotating presidency, Hungarian Prime Minister Orban repeatedly emphasized that enhancing the competitiveness of the EU in the world economy is essential for Europe to avoid self isolation and protectionist reactions based on fear of global development. Orban said that China is an active participant in the modernization of the Hungarian economy, and economic cooperation between China and Europe needs to be continuously strengthened.

Hungarian Minister of Foreign Affairs and External Economic Affairs Szijjardo: Europe's competitiveness has been declining in the past period, and we believe that developing economic cooperation with China is crucial for restoring Europe's competitiveness. The close cooperation between Western large automobile companies and Chinese enterprises is a fundamental prerequisite in the process of green transformation. The isolation of the Chinese and European automotive industries from each other will also cause environmental problems, because if the speed of green transformation slows down, we will not be able to achieve our own environmental goals. In the future, we will strive to avoid tariff and trade wars between China and Europe, and promote mutually beneficial economic cooperation.

The 'overcapacity theory' of China's new energy is a false proposition

The theory of overcapacity in China's new energy industry violates economic principles and is a false proposition that is difficult to justify. Under market economy conditions, supply-demand balance is the result of multiple factors such as market competition and economic cycle fluctuations. In the era of economic globalization, supply and demand issues should be viewed from a global perspective, and a country should not be labeled as "overcapacity" just because it has industrial advantages.

Hungarian Minister of Economy Nagi Marton: I don't understand what the so-called 'overcapacity theory' is. Because if it does exist, it means that the relevant companies will go bankrupt because their products no longer have market demand. So, if there really is the 'overcapacity theory', it will also disappear the next year. That is to say, there is no 'overcapacity theory'. I would like to emphasize again that if there is an "overcapacity theory", the market will determine that such enterprises cannot survive, and if Chinese enterprises are doing well in business, it indicates that there is a demand for their products in the market.

Under the current situation, imposing tariffs is the worst option and will lead to a vicious cycle of escalating trade frictions. Only through dialogue and negotiation can we find a solution. Setting high tariff barriers on Chinese electric vehicles not only fails to protect the competitiveness of the European economy, but also harms the interests of European consumers, undermines cooperation between the European and Chinese automotive supply chains, and delays the EU's green and low-carbon transformation.

CCTV reporter Xu Ming: Europe has long been a world leader in the traditional fuel vehicle field, but its pace of electrification and intelligent transformation is relatively slow, making it difficult to meet consumer demand, leading to severe challenges for the automotive industry. This was originally a European problem, but the EU attributed it to external factors.

In response to the European Commission's imposition of tariffs on electric vehicles imported from China, European politicians and business people have recently expressed dissatisfaction, believing that this move is detrimental to the interests of European consumers, will delay the transformation and upgrading of the European automotive industry, is not conducive to enhancing Europe's competitiveness, and does not help achieve carbon neutrality goals.

The German Association of the Automotive Industry (VDA) has issued a statement stating that this move harms European consumers and companies, hinders the popularization of electric vehicles in Europe, causes significant damage to the European automotive industry, and will also hinder the development of global enterprises.

Editor Li Yilinzi