Chinese cars, countdown to EU duties. German manufacturers: 'They need to be rethought'

But in the Europarliament, the largest political family, the EPP, while reaffirming its support for the EU's binding targets to reduce greenhouse gases by 55 per cent within this decade compared to 1990 levels and to achieve climate neutrality by mid-century, insists on making room for thermal engines powered by synthetic or e-fuels (low-emission) even after 2035. The latter is the deadline set in February 2023 for stopping the production of conventional engines.

Meanwhile, the Chinese Ministry of Commerce announced this morning that several consultations had been held at a technical level between China and the EU on tariffs for electric vehicles. China 'hopes that the EU will work with China in the same direction on the issue,' said ministry spokesman He Yadong.

The tension is palpable and can also be felt in other sectors. Just yesterday, the European wind turbine industry harshly criticised the agreement between the German asset manager Luxcara and the Chinese Ming Yang, which was supposed to supply 16 turbines with a capacity of up to 18.5 MW, installation scheduled for 2028. Luxcara said it signed the deal after an international tender and due diligence on the supply chain. But this was not enough to avoid a clash. The Berlin government will review the project. Not only that. The German government has also blocked the sale of Man Energy Solutions, the gas turbine manufacturer controlled by Volkswagen, to China. For the ministry, the potential buyer not only belongs to a state-owned shipyard group, but also has links to the Chinese military.

Returning to cars, the Chinese advantage in cost competitiveness cannot be underestimated: it is around 35 per cent according to the global consultancy AlixPartners. This factor could allow some players - waiting to set up production facilities, as BYD and Chery are doing - to absorb the impact of European duties and remain competitive. 'The march of Chinese electric vehicle brands in Europe will continue,' commented Lei Xing, founder of the consultancy AutoXing. 'It is like going from 80 to 60 km/h or even less, but without stopping.

Europe is not alone. Southeast Asia's largest economy, Indonesia, is preparing to impose tariffs and take other measures to protect its textile industry from imports from China. Indonesia has maintained an overall trade surplus for the past four years. However, the surplus with China turned into a deficit in May. Tariffs, again, would be a tricky choice: Beijing is the main source of imports and the biggest customer for Indonesian exports.