Can EU tariffs on Chinese vehicles trigger a trade war? – Danske Bank
|Last week, the result of the EU Commission’s anti-subsidy investigation on Chinese Electric Vehicles (EVs) was finally released. EU tariffs on Chinese vehicles will increase from 10% to 27- 48% depending on the car brand, Danske Bank Chief Analyst Allan Von Mehren notes.
Trade war is an unlikely scenario
“EU tariffs on Chinese vehicles will increase from 10% to 27- 48% depending on the car brand. The tariff lift will create a higher barrier for Chinese EVs but they are likely to still be able to compete.”
“China denounced the move as “a blatant act of protectionism” and this week hit back with an anti-dumping investigation into imports of EU pork, which is says is supported by subsidies with EU exporting its’ overcapacity to China. It thus returns EUs accusations that China is exporting its’ overcapacity to Europe.”
“While the EU-China trade tensions are clearly on the rise, it is still in quite narrow sectors and in our view not big enough to be a trade war. We also doubt it will evolve into a wider trade war as neither EU nor China have any interest in this given economic vulnerabilities in both areas. Also, the EU is divided over the issue with especially German car companies speaking up against the tariffs.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.