Escalating trade tensions between the European Union and China over tariffs on electric vehicles threaten to shake up economies around the world. While Brussels voted in favor of these measures, Beijing is preparing its response, leaving the shadow of targeted reprisals hanging over the European countries most favorable to this decision.
European supporters of customs duties in the crosshairs
The EU's recent decision to impose tariffs on Chinese electric vehicles has sent shockwaves through the international business world. Among the 27 member states, 10 voted for, 5 against, and 12 abstained.
China, wasting no time in reacting, has already threatened targeted reprisalsparticularly on brandy, pork and European dairy products.
The European, particularly German, automobile industry finds itself in a delicate position. Although Germany voted against these customs duties, luxury brands like Audi, Porsche or Lamborghini could be the first victims of a Chinese response.
Oliver Blume, CEO of Volkswagen, has also expressed his concerns about the potential impact on the German automobile industry.
European sectors vulnerable to China's reaction
China has a wide range of options to respond, targeting key sectors of the European economy. The pork industry, already under anti-dumping investigation, could be the first victim. Spain, Denmark and the Netherlands, the EU's main suppliers, risk suffering the heaviest consequences.
The dairy sector is not left out, with the Netherlands, France and Ireland particularly exposed.
Faced with this tense situation, the EU and China continue to negotiate, notably exploring the possibility of a mechanism to control prices and export volumes as an alternative to customs duties.
However, experts remain pessimistic about the outcome of these talks. Henry Gao, professor at the Singapore Management University, believes that “ the probability of reaching an agreement is rather low” and does not exclude a strong reaction from China in the event of failure of the negotiations.
This trade conflict between the EU and China will undoubtedly have repercussions far beyond their borders, affecting the global economy as a whole.
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