China Tells Automakers to Shun EU Tariff-Supporting Countries

MG’s Chinese owner SAIC is threatening to file a lawsuit in Europe to challenge the European Union’s right to impose punitive tariffs on its imported battery-electric vehicles.

Meanwhile, the Chinese state-owned automaker is among domestic carmakers being instructed by the communist government to stop investment plans in the countries that supported the imposition of tariffs in force from this week, according to Reuters sources.

SAIC, one of the companies facing the maximum tariff of 45.3% for failing to release data on unfair government financial support to European Commission investigators, says it will pursue legal action in the European Court.

It claims the tariff investigation involved the disclosure of commercially sensitive information, contained errors in its subsidy determination and has ignored certain key information and defense arguments submitted by the company.

Tariffs on Chinese-built BEVs are imposed on a sliding scale dependent on how much cooperation companies provided to the commission’s investigation with Tesla facing just 17.9%, including the standard third-country 10% tariff.

Despite the legal challenge, the loss-making SAIC says it plans to continue importing MG cars to the EU bloc and is “taking a series of measures to enhance its ability to adapt to European trade barriers.” Plans include introducing new models and powertrains.

At the same time, China tells its automakers to focus European investment plans on European countries that did not actively support the imposition of tariffs.

Ten EU members including France, Poland and Italy supported tariffs in a vote while five members, including Germany, opposed them and 12 abstained.

Reuters sources say Chinese automakers, including SAIC, BYD and Volvo owner Geely, were told at a meeting held by the Ministry of Commerce that they should pause any heavy asset investment plans, such as factories, in countries that backed the tariffs.

The sources add that the companies were also “encouraged” to invest in European nations that voted against the tariffs.

Italy and France are among EU countries that are courting Chinese automakers to site new factories in their countries while also warning that unfairly subsidized cheap Chinese BEVs pose a threat to European producers.

SAIC had been planning its second European parts center for MG cars in France and Italy is currently in talks with Chery and Dongfeng about potential new production facilities.

Sources also claim the Chinese ministry also advises automakers to avoid entering talks with European nations as single companies but to negotiate as a more powerful collective.