It's “definitely hypocritical” on the part of the European Union to accuse countries like China of subsidizing their companies when many EU nations are “very trade protectionist” themselves, Thomas W. Pauken II, geopolitical commentator and consultant on Asia-Pacific affairs, told Sputnik.
He noted that “France, Germany, all of these countries do the same exact thing they're accusing China of. So it's really strange and odd that they would use these accusations against China as a reason to increase tariffs [on EVs].”
Those Chinese companies that “apparently thought that the EU was a good market for them” will be impacted initially by the tariffs of up to 45% on their electric vehicles announced by the European Commission on Friday, the geopolitical analyst believed.
However, the move could prompt Chinese companies to rethink their long-term business strategy.
“Instead of focusing on Europe and the US, they're probably just going to focus more on consumers in China and in Southeast Asia and elsewhere,” the pundit underscored, adding that the Middle East is becoming a bigger player, too.
Pauken II pointed out that the People's Republic of China has a track-record of “responding very firmly against trade protectionist measures or increasing tariffs.”
“They tend to do the same as how they were treated… So, of course, this is very likely to happen,” he said.
Auto Shanghai 2023 show in Shanghai, Tuesday, April 18, 2023.
© AP Photo / Ng Han Guan
The analyst didn’t find it plausible that China might consider setting up more manufacturing bases in Europe as a future loophole allowing it to dodge the tariffs. He said it wouldn’t be a smart decision, recalling that this approach didn’t work in the US, where the Biden administration has pushed the unsubstantiated narrative that China has connected car software for spying purposes.
The tariff move, Pauken II added, fits into the current geopolitical conditions where the US and Europe “are turning very strong against China.”
Regarding reports of the EU and China negotiating a possible alternative solution (regulated by WTO rules) to the trade conflict, the analyst wondered:
“Why would the EU announce these tariffs and then suddenly say that we need to do something alternative? It doesn't make sense. What probably happened is that the EU and Brussels imposed the tariffs and then suddenly a lot of EU companies complained about this. So now they're trying to find a way to do a walk back. But the only way to do a walk back is by not doing the tariffs, and Brussels won't do that.”