In response to the trade war, the Asian giant is investing billions of dollars abroad in plants, especially in industries linked to the energy transition
China is aware that its investments can be a bargaining chip for member states to bring down their trade barriers. At the same time, setting up in the EU would be a way of avoiding tariffs, if they end up being confirmed: cars would have the “produced in the EU” stamp, leaving behind added value, employment and the transfer of knowledge.
Could the EU not just put restrictions on Chinese-owned car companies regardless of where the factory might be located?
There are two valid reasons that tariffs are normally applied. The first is to protect the local economy. This usually makes sense where there are marked differences in the cost of living in two regions, giving a financial advantage to the region with the lower CoL. The second is to counteract subsidies in one region allowing a lower sale price in another region. The idea here is to remove the unfair advantage the subsidized companies are enjoying.
There are other reasons, such as simple protectionism, where relative competitiveness is ignored and is more broadly applied to restrict foreign goods and services from flooding a market.
The reason for not applying tariffs for locally-made products is pretty straightforward. Employees are local, goods produced are local, business taxes (if actually paid) are local. Profits will undoubtedly be siphoned off to China, but that’s the case for any foreign owned business.
China definitely, 100% bro, has no possible ulterior motives for subsidizing the fuck out of their electric vehicle industry to out compete it in its early stages across the west. Yeah, right.
Tell me again about how China has no import tariffs on anything?
Okay, here’s the part I don’t understand:
Could the EU not just put restrictions on Chinese-owned car companies regardless of where the factory might be located?
Why would the EU want to do that?
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Then why the tariff?
There are two valid reasons that tariffs are normally applied. The first is to protect the local economy. This usually makes sense where there are marked differences in the cost of living in two regions, giving a financial advantage to the region with the lower CoL. The second is to counteract subsidies in one region allowing a lower sale price in another region. The idea here is to remove the unfair advantage the subsidized companies are enjoying.
There are other reasons, such as simple protectionism, where relative competitiveness is ignored and is more broadly applied to restrict foreign goods and services from flooding a market.
The reason for not applying tariffs for locally-made products is pretty straightforward. Employees are local, goods produced are local, business taxes (if actually paid) are local. Profits will undoubtedly be siphoned off to China, but that’s the case for any foreign owned business.
https://en.wikipedia.org/wiki/Protectionism
China definitely, 100% bro, has no possible ulterior motives for subsidizing the fuck out of their electric vehicle industry to out compete it in its early stages across the west. Yeah, right.
Tell me again about how China has no import tariffs on anything?