Brussels breaks impasse after EU countries fail to agree on Chinese EV tariffs

Chinese producers of electric vehicles will soon face steep tariffs before selling their high-end goods in the EU market.

Transcript

00:00European member states have failed to agree on whether the EU should apply steeper tariffs

00:08on China-made electric vehicles.

00:10Now the decision goes back to the EU Commission, who can implement its proposal.

00:15This means that the tariffs can be imposed.

00:18The voting council revealed clear divisions.

00:20Ten countries voted in favour of the tariffs, with France and Italy amongst them, Germany

00:25and four more countries voted against.

00:27However, the abstention of 12 countries meant that there was no result.

00:35Germany's car manufacturers operate largely at the higher end, it's mostly premium cars,

00:40and they invested heavily within China.

00:43Given that they're premium branding, they're not too worried about competition on the lower

00:47end of the markets from Chinese imports.

00:50Whereas French and Italian producers have not invested as heavily in China, and they

00:54compete much more directly on the lower end of the market, and they're therefore much

00:57more worried about the effect that Chinese competition would have for the European market.

01:05The high number of abstentions reflects long-standing concerns about how Europe should stand up

01:11to China.

01:12Even though there is agreement about the fact that Beijing's unfair trade practices married

01:16a forceful united response, fears of commercial retaliation appear to have dampened the resolve

01:22of many capitals, especially with a make-or-break date approaching.

01:29I think what is clear is that the Chinese government would retaliate, that is what they

01:33normally do, and they already signalled where they will do this, which would be agricultural

01:37exports.

01:38Now, compared to the EV market, the agricultural market, even though it's politically very

01:43important, is economically not that big.

01:45So the question is basically, will that be enough for an escalation on the European side,

01:49and basically to which extent the Chinese side will escalate in more and more bigger sectors.

01:55Friday's vote marked a victory for the President of the Commission, Ursula von der Leyen.

02:00In its statement, the EU Commission still left the door open for a different outcome,

02:05stating that the EU and China would continue to work hard to explore an alternative solution.