After European Commission President Ursula von der Leyen announced an investigation by the European Commission into Chinese subsidies for electric vehicles, sharp criticism and accusations of protectionism have come from Beijing. China also warned that such EU announcements would undermine already strained economic and trade relations.
Von der Leyen announced the investigation, accusing China of flooding global markets with electric cars that have artificially low prices due to large state subsidies.
The investigation, which could result in punitive tariffs, has prompted many analysts to issue warnings about potential Chinese retaliation, as well as discontent from Chinese auto industry leaders who say that the sector’s competitive advantage is not a result of subsidies.
– The investigation is a ‘naked protectionist act that will seriously disrupt and undermine the global automotive industry and supply chain, including the EU, and will have a negative impact on China’s and the EU’s economic and trade relations,’ states a statement from the Chinese Ministry of Commerce.
China will pay close attention to the EU’s protectionist tendencies and further actions and will firmly protect the legitimate rights and interests of Chinese companies, it adds.
Analysts warn that Beijing is likely to introduce countermeasures if the EU ultimately imposes tariffs on subsidized Chinese electric vehicles, aiming to harm European industries. Other analysts say that the investigation could slow the expansion of Chinese battery suppliers’ capacities, although this move should not pose a significant negative risk for Chinese electric vehicle manufacturers as they could turn to other growing markets such as Southeast Asia.
