An American think tank is warning that Europe’s planned 45% tariff on Chinese electric vehicles will be too low to be effective.
The Council on Foreign Relations warns that plans for tariffs to stem a flood of subsidised cars that threaten the survival of European automakers won’t work because Chinese will simply “lower their hefty margins and absorb the impact”.
It says Chinese smart cars pose a threat to the bloc’s security “that demands more than half-hearted trade measures”.
It explains that last month, the US Department of Commerce proposed a groundbreaking rule to restrict the import of certain Chinese- and Russian-made components in internet-connected vehicles – a category that includes virtually all modern cars. It says the EU should take similar steps.
“The US rule is not driven by alarmism or protectionism,” it adds. “It aims to create a firewall against a potential influx of mostly Chinese smart cars into the US market that would pose significant cybersecurity and supply chain risks to critical infrastructure and sensitive data. The new rule comes not a moment too soon, given China’s impressive rise to become the world’s top automobile producer in 2023.”
(Picture – Yay Images)
