EU's dilemma: Can tariffs halt China's car surge?
When questioned about tariffs on Chinese cars, Jean Philippe Imparato of Stellantis expressed skepticism, suggesting that imposing tariffs wouldn't necessarily prevent any outcomes. Meanwhile, EU countries have collectively decided to implement these tariffs. Brussels accuses China of subsidizing production, which threatens European industry.
- In the 80s and 90s, people talked about the Japanese Toyota invasion in Europe. A decade ago, the same was said about cars from South Korea. And what? Did anything stop them? Are tariffs capable of stopping anything? No - said Jean Philippe Imparato.
In recent years, he managed Alfa Romeo. Now, he is the right hand of CEO Carlos Tavares in the large Stellantis automotive group, including Opel, Fiat, Lancia, and Maserati. He was recently appointed COO for the European region and several other countries outside of Europe. He is also considered one of the candidates to succeed Tavares as CEO - expected to leave at the beginning of 2026.
The European Commission conducted an investigation and found that China is subsidizing the production of electric cars, enabling them to sell cars at artificially low prices. This raised concerns within the EU that the European automotive industry would become the next sector unable to cope with China's unfair competition.
France and Poland for tariffs on Chinese cars, Germany against
On 4 October, European Union countries agreed to impose tariffs on Chinese electric cars. The EU receives 40% of China’s electric vehicle exports.
Germany, Hungary, Malta, Slovenia, and Slovakia were against imposing tariffs on Chinese electric cars. Belgium, Czech Republic, Greece, Spain, Croatia, Cyprus, Luxembourg, Austria, Portugal, Romania, Sweden, and Finland abstained. Poland and other EU countries were in favour.
The European Automobile Manufacturers' Association (ACEA) reports that in 2019, cars of Chinese brands accounted for 0.4% of new electric car sales in the European Union. In 2020, the share rose to 1.4%, to 1.7% in the following year, and by the end of 2022, it reached 3.7%. According to European Commission data, this share will reach 15% in 2025.
We talk about the Chinese as competition. Let's prepare for the Indians, cars from India are a matter of time. We cannot imagine that we will stop anything by imposing tariffs - added Imparato.
In 2023, the Indian automotive giant Tata Group, owner of Jaguar Land Rover, announced plans to build a battery factory for electric cars in the United Kingdom.
Secondly, I hear a lot about tariffs on passenger cars from China, but on delivery vans. Nothing, zero. They are ready: They homologate a model in Europe, and the next morning, they can sell it. For some competitors, tariffs might give them a few months to find a way to be more competitive in terms of price and costs, but it will not change the market, he added.
- I will not comment on it anymore, I will try to live with it - emphasised Imparato.
EU negotiates with Beijing
According to Reuters sources, on Friday, France, Greece, Italy, and Poland are set to vote for 45% tariffs on Chinese electric cars. This is expected to be enough to push through such a radical measure in the EU, "risking potential retaliation from Beijing."
European Commission President Ursula von der Leyen met in Berlin on Monday with German Chancellor Olaf Scholz. The talks included tariffs on Chinese cars. The Berlin government is against their introduction, fearing retaliatory actions on the Chinese market against German car manufacturers.
The European Commission has not officially announced a decision to impose tariffs since 4 October. According to Reuters, talks with the Chinese are ongoing. During a speech with Olaf Scholz, Ursula von der Leyen announced that negotiations would continue even if EU tariffs on Chinese electric vehicles come into force. Scholz expressed hope for reaching an agreement by the end of October.
- What kind of compensation could be offered instead of countervailing duties? There is also the issue of price commitments that are on the table, such as investment in Europe, said Ursula von der Leyen on Monday in Berlin.
Meanwhile, Carlos Tavares, CEO of Stellantis, warned in an interview with Reuters that imposing tariffs will prompt Chinese car manufacturers to set up factories in Europe, which will only increase the region's production overcapacity and lead some local manufacturers to close factories.
Stellantis and Chinese joint business
Stellantis withdrew from the Chinese market in 2023. At that time, it sold its three factories - in Chengdu, Xiangyang, and Wuhan. The European group operated in China within a joint venture with Dongfeng Motors - Dongfeng Peugeot Citroën Automobile. The group's CEO, Carlos Tavares, announced such a decision a year earlier.
But recently, Stellantis found another business partner in China. It collaborates in Europe with the Chinese company Leapmotor, a manufacturer of electric cars and SUVs, which has been operating since 2015. In the joint-venture company Leapmotor International, Stellantis holds 51% of the shares, and the Chinese hold the remaining 49%. The debut took place a few weeks ago in Milan.
