China Might Apply Import Duties on EU Luxury Vehicles image

Les Echos newspaper reported that China takes into consideration applying import duties on European high-end vehicles, due to complaints from automakers.

European automakers complained that the Chinese subsidies make them sell vehicles in the country at a loss. On the other hand Chinese automakers have filed a complaint regarding the imported luxury European models. These problems lead to increasing tensions between the two biggest trade partners in the world.

This week China has started an anti-subsidy and anti-dumping inquiry into sales of European wine after the EU has already imposed anti-dumping duties on the solar panels coming from China. If import duties on luxury vehicles will be applied, this will hurt especially the German automakers BMW and Mercedes-Benz.

The newspaper report also hints that the Chinese government has more to bring on the table in this dispute with Brussels, which started the tensions with its move against the solar panels coming from China. The Chinese authorities could not be reached for comments, but both nations previously said that they will try to solve the dispute through talks.

Luxury sales in China surpassed overall auto sales, the segment racking up 36% average annual growth over the past 10 years, compared with 26% for the total auto market in China. A recent study made by McKinsey & Co. shows that China’s luxury sales are expected to grow from 1.25 million last year to 3 million by 2020, surpassing both the US and Western Europe.

Source: Reuters