European Commission Announces Countervailing Investigation into Chinese Electric Vehicles
In her recent State of the Union address, European Commission President Ursula von der Leyen revealed that the European Commission is set to launch a countervailing investigation into electric vehicles from China. This announcement has drawn significant attention from both China and Europe. However, experts believe that this move by the European Commission may not be able to solve the dilemma it is currently facing.
One of the main reasons behind the EU’s decision to launch the investigation is its desire to become a more independent participant in global geopolitics. Von der Leyen has been working towards this goal since assuming office and sees this investigation as a way to further strengthen the EU’s “geopolitical” standing.
Additionally, the European Commission is facing a change in leadership, and von der Leyen may be using this investigation as a bargaining chip to gain support from France and the United States in her bid for re-election or another position, such as NATO Secretary-General.
Economically, there are concerns that the growth of Chinese electric vehicles in the European market could have a negative impact on the EU’s automobile industry. Currently, Chinese electric vehicles hold an 8% market share in the EU, and this is expected to increase to 15% by 2025. The European Commission fears that this could potentially affect the development of the European automobile industry.
However, the EU’s decision to launch the investigation has garnered mixed reactions within the bloc. Germany, one of Europe’s largest automobile countries, has voiced clear opposition, while France, another major player in the sector, supports the investigation. The discrepancy in reactions can be attributed to the fact that the German automobile industry has greater exports and investments in China compared to France.
Some experts argue that the EU’s judgment that “large government subsidies make Chinese electric vehicles highly competitive” is not entirely accurate. They believe that the competitiveness of Chinese electric vehicles stems from their combination of high quality and low price, as well as China’s experience and foresight in the electric vehicle industry.
There are concerns that if a trade war were to break out between China and the EU, it would be a lose-lose situation for both sides. The EU’s ability to withstand such a conflict is considered to be lower than that of China. The potential impact on the EU’s major industries, such as the automotive sector, would be significant. Last year, the EU exported goods worth $240 billion to China, making it the third largest overseas market for European goods.
In conclusion, the European Commission’s decision to launch a countervailing investigation into Chinese electric vehicles has sparked controversy within the EU. While the move is driven by political and economic considerations, there are concerns that it may not effectively address the challenges faced by the European automobile industry. Should a trade war arise between China and the EU, both sides would suffer, but the EU may be less equipped to withstand the consequences.