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EU Imposes Unprecedented Tariffs On Chinese Electric Cars

by THEFUTURE.TEAM

July 4, 2024

The European Union will impose tariffs of up to 37.6% from July 5 on imports of electric vehicles made in China, EU officials said, raising tensions with Beijing in Brussels’ biggest trade case yet.

KEY FACTS

The tariffs are expected to be in effect for 4 months, during which the “intense” trade negotiations between the European Union and China are expected to continue.

The European Commission’s provisional tariffs ranging from 17.4% to 37.6% are designed to prevent subsidized cheap Chinese electric cars from flooding the European market

The new duties will vary for different Chinese manufacturers. For example, a rate of 17.4 percent is foreseen for BYD, 19.9 percent for Geely, and 37.6 percent for SAIC.

The temporary trade defense measures are being imposed because Chinese companies are in a more privileged position than their competitors, benefiting from illegal state subsidies, the European Commission said in June.

ACCENT

China does not want to be drawn into another tariff war while it is still trying to cope with new import tariffs recently imposed by the US. Washington effectively ended duty-free imports of a number of goods worth $18 billion, including electric cars. Coming under the blows of the European Commission, Beijing promises to take all necessary measures to protect Chinese companies.

KEY STORY

The EC’s actions are related to an investigation the commission launched at the beginning of October last year, aimed at checking the Chinese government’s subsidized imports of electric cars from Beijing. The EC concludes that such a state subsidy exists and it represents economic harm to European producers by undercutting prices.

Overcapacity in the Chinese industry (not just in the electric car market) is seen as a major problem, including by businesses in Europe, according to a survey. Recently, EC President Ursula von der Leyen commented to the Financial Times that Beijing has a huge overcapacity that is flooding the EU market with artificially cheap goods and gave a clear signal of a response.

First steps as part of this broader economic stand-off were taken by the US by effectively ending zero tariffs on imports from China. Tariffs on a number of goods with a total value of 18 billion dollars were increased, with the minimum increase being 0.25%.

The EU has also said it will take similar measures in a bid to tackle subsidized imports from China that undercut European prices. Some of these measures will probably affect the import of solar panels, the parts of which are mainly Chinese. We go back even further to a US-EU meeting in Leuven in early April of this year where an agreement was reached to strengthen cooperation in clean energy markets. Shortly thereafter, the US imposed higher tariffs on imports of certain goods from China.

All these concerns about the electric car market in Europe are not unfounded. BYD, China’s largest electric car maker, unveiled its models in Europe last month. In December last year, BYD announced its plans to build a factory in Hungary. China’s Nio opened a new showroom in Amsterdam, and in April Chery entered into a joint venture with Spain’s Ebro-EV Motors to develop new electric vehicles.

Apple Loses €13 Billion Tax Battle Against EU: A Landmark Decision for Big Tech

by THEFUTURE.TEAM

September 11, 2024

In a landmark ruling, the European Court of Justice has upheld the European Union’s demand for Apple to pay €13 billion in back taxes to Ireland, marking a significant defeat for the tech giant. This decision sets a major precedent for the regulation of Big Tech companies, as it reaffirms the EU’s commitment to curbing tax avoidance by multinational corporations operating within its borders.

The case, which dates back to 2016, centres around allegations that Apple received illegal state aid from Ireland through preferential tax arrangements. The European Commission argued that these agreements allowed Apple to avoid paying its fair share of taxes on profits generated in Europe, effectively granting the company an unfair competitive advantage. The Commission initially ordered Apple to repay €13 billion, a decision the company contested in court.

Apple’s defence has always hinged on the argument that it followed the tax laws as they were written and that the profits in question were largely attributable to its operations outside of Europe. Despite this, the EU maintained that Apple’s arrangement with Ireland constituted illegal state aid, as it allowed the company to channel significant revenue through the country while paying a fraction of the taxes it would have owed in other jurisdictions.

This ruling is seen as a watershed moment in the ongoing debate around tax fairness and the role of multinational corporations in the global economy. For the European Union, the outcome reaffirms its position as a global leader in the push for corporate tax transparency and accountability. By holding Apple accountable for its tax practices, the EU is sending a clear message to other tech giants, signalling that no company, regardless of its size or influence, is above the law.

The implications of this decision are likely to reverberate throughout the tech industry, with other major corporations potentially facing increased scrutiny over their tax arrangements. In recent years, there has been growing public and governmental pressure to ensure that Big Tech companies contribute their fair share to the economies in which they operate. This ruling could catalyze further regulatory action, both within the EU and globally.

For Apple, the financial impact of the ruling is significant, but perhaps more important is the reputational damage it may suffer. As one of the world’s most valuable companies, Apple has long been in the spotlight for its tax practices, and this decision is likely to reignite debates over corporate responsibility and the ethics of tax avoidance.