The European Union (EU) is launching an investigation into Chinese subsidies for electric vehicles to ward off a flood of cheap imports, its chief, Ursula von der Leyen, has announced.
The probe could lead the European Union to impose duties on those cars that it believed were unfairly sold at a lower price, thereby undercutting European competitors.
Bloomberg reports that European Commission president, Ursula von der Leyen, announced the anti-subsidy investigation on Wednesday, vowing to defend Europe’s manufacturers.
“We have not forgotten how China’s unfair trade practices affected our solar industry. Many young businesses were pushed out by heavily subsidized Chinese competitors,” von der Leyen said, during a speech at the European Parliament in Strasbourg.
She said Europe was open for competition but not for a race to the bottom.
“Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies,” the European Commission president said.
Pointing to information from the European Automobile Manufacturers Association (ACEA), Wang Lutong, Director-General of the Chinese Foreign Ministry’s Department of European affairs, said “many EU members subsidise their electric vehicle industries.
“In what position is the commission to launch anti-subsidy investigation into electric vehicles from China? This is nothing but sheer protectionism.”
French Finance Minister, Bruno Le Maire, said the probe was a “very good decision” during a visit to Berlin.
Germany’s Economy Minister Robert Habeck said it showed the “right attitude” and was about tackling “unfair competition”.
Paris has already announced measures that would provide subsidies for new electric cars based on the manufacturers’ emissions output.
This would be more difficult for Chinese cars since their production often relies on coal-powered electricity.
“The European Commission is recognizing the increasingly asymmetric situation our industry is faced with, and is giving urgent consideration to distorted competition in our sector,” said Sigrid de Vries, director general of the ACEA.
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