Tariffs on Chinese Cars: The European Union Chooses US over China

The European Commission’s announcement of imposing punitive tariffs on imported Chinese electric cars is a geopolitical choice. At the same time, the growth of car manufacturing in the European Union, and therefore the creation of new jobs, will help stop the surge of populism in Europe, which is currentl on Brussels' mind more than climate change.

Cheap gas from Russia, a free ride in NATO, and mass exportation to China: The German economy has been able to count on three powerful engines of growth for years. The invasion of Ukraine by Putin's troops in February 2022 brutally put an end to the first two; Olaf Scholz, however, hoped that at least the third would continue to work for some time.

The European Commission Is Introducing Punitive Tariffs on the Import of Chinese Electric Cars

However, the chancellor did not take the firm position of the White House into account. America is preparing to take on China in the race to be the most important country in the world in the 21st century. Joe Biden has been demanding a clear answer from his European allies for some time as to who they’re siding with: Washington or Beijing.

On Wednesday, we got the answer. The European Commission announced that, if the majority of EU member states agree, it will impose punitive tariffs on the import of Chinese electric cars. Taking into account current tariff rates (10%), they may total up to 50%. With that kind of a tax burden, purchases in a large part of the Chinese market become unprofitable. This is a huge blow to Xi Jinping's strategy to expand the country's industrial and technological potential.

Which EU Countries Are in Favor of Tariffs, and Which Want Continued Collaboration with China?

However, punitive tariffs represent not only a choice between the U.S. and China, but between forcefully limiting global warming and saving production in the EU itself, as well. While it is true that Chinese cars contributed to the rapid replacement of European vehicles with more ecological ones, Beijing never played fair. The Chinese authoritarian state widely supported car production, and European automotive companies could not rely on this situation. The growth of car manufacturing on the “old continent,” and thus the creation of new jobs, will help stop the surge of populism in Europe, which is currently more on Brussels' mind than climate change.

However, EU countries are divided on the European Commission's proposal. France and Spain are firmly committed and want to sustain their own car manufacturing industry. Germany remains against it, as does Hungary, whose authoritarian leader Viktor Orbán is establishing increasingly closer ties not only with Moscow, but also with Beijing. The Swedes (Volvo belongs to the Chinese tycoon Geely) and Italy, a large exporter of luxury goods to the Middle Kingdom, also do not want a trade war with China.

Should Poland Vote for Tariffs or Support Olaf Scholz?

To stand its ground and block the punitive tariffs proposed by Brussels, Berlin will have to find a dozen other allies. The Czechs and Slovakia are inclined to follow suit. Should Poland do so, too?

Germany is our largest trading partner. We supply them with car parts on a large scale, so we cannot be indifferent to the fate of German automotive companies. And Volkswagen alone sells 40% of its cars to China. But the imposition of punitive tariffs will force the Chinese to manufacture in the EU. This will also make Geely's investment in the production of Izera cars in Jaworzno more feasible.

However, this geopolitical choice seems to be a major one. Russia and China form a large authoritarian power that threatens our security, while America is the leader of the side for freedom. It is America that defends Polish democracy, so we should support America.