German Auto Industry Faces Another Setback
This article was written by Mike Shedlock via MishTalk.com. The German auto industry is facing another setback, as the European Union (EU) votes for tariffs on Chinese electric vehicles (EVs). Unlike their American counterparts, German car manufacturers were against these tariffs. This is primarily because Germany is still reliant on its internal combustion engines for exports, and there is a high likelihood of China retaliating.
EU Votes for Tariffs on Chinese EVs Despite Germany's Opposition
Germany's opposition to the tariffs on Chinese EVs is due to its dependence on its car industry, which relied on China for a third of its sales last year. However, despite Germany's protests, the EU voted in favor of the tariffs. Euronews reported that 12 member states abstained from the vote, with 10 voting in favor and five voting against, including Germany, Hungary, Malta, Slovenia, and Slovakia.
EU-China Negotiations Continue Despite Vote
Despite the vote, EU-China negotiations can continue until October 30, with the possibility of reaching an agreement to prevent the tariffs. Germany sought to block the proposal to protect its car industry from any potential Chinese retaliatory measures. However, to block the proposal, Germany would have needed the support of another 14 member states, which it did not receive.
Germany's Electric Car Production
Germany is currently not on track to meet its target of having 15 million electric cars on its roads by 2030, despite being the world's second-largest producer of electric cars in 2023.
Brussels Breaks Impasse After EU Countries Fail to Agree on Chinese EV Tariffs
The European Commission had to step in and push its proposal over the finish line after EU countries failed to agree on whether to impose steeper tariffs on China-made electric vehicles. The vote's outcome was not publicly available, but several diplomats shared how each member state positioned itself.
EU Tariffs on Chinese EVs
The EU tariffs on Chinese EVs are as follows: Tesla: 7.8%, BYD: 17%, Geely: 18.8%, SAIC: 35.3%, Other EV producers in China that cooperated in the investigation but have not been individually sampled: 20.7%, Other EV producers in China that did not cooperate: 35.3%. These are on top of existing tariffs.
Similar Scenario in the US
In the US, those in charge not only mandate EVs but also set policies to ensure the cars are as expensive as possible. This is due to regulations that have led truckers to drive older engines longer because they cannot afford newer diesel models, resulting in more pollution.
Joe Biden's Position on Tariffs
On May 14, 2024, the White House announced new anti-China tariffs, which included electric vehicles, EV batteries, solar cells, steel, and aluminum.
Impact of Tariffs on the German Economy
The tariffs on Chinese EVs could have a significant impact on the German economy, which is heavily dependent on its auto industry. The new cars will have fewer components, and fewer German-made components. This could lead to a decline in the industry and the economy.
Buy American Provisions Cost $125,000 Per Job Created
The "Buy America" provision sounds great, but it's costly and is set to rise steeply. The competition for the most idiotic tariff policy is stiff between Biden, the EU, Harris, and Trump.
Bottom Line
The decision to impose tariffs on Chinese EVs, despite Germany's opposition, could have far-reaching implications for the German auto industry and the economy as a whole. The situation raises questions about the effectiveness of such tariff policies and their impact on global trade and industry. What are your thoughts on this issue? Feel free to share this article with your friends and discuss it further. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
