Xinhua Commentary: EU's tariff hikes on Chinese EVs detrimental to its climate goals

BEIJING, June 14 (Xinhua) -- The European Commission's plan to impose additional tariffs on Chinese electric vehicles (EVs) stands as an example of short-sighted protectionism, which is set to hinder the region's clean energy growth and runs counter to its climate objectives.

The choice to impose heavy restraints on clean energy products came despite the European Union's lofty pledge to reduce emissions by at least 55 percent by 2030 compared to 1990 levels and transition to a zero-emission standard for all newly registered cars and vans by 2035.

Unlike the United States, which is an oil exporter, the European Union is grappling with a precarious dependence on fossil fuel supply and is urgently in need of an overhaul in its energy sector.

A 2022 analysis conducted by Leiden University underscored the urgency for the European Union to accelerate the phasing-out of internal combustion engine vehicles and transit to e-mobility at a faster pace to meet its 2030 carbon target.

The bloc is also working on new legislation to make a climate-neutral target by 2050 to meet its commitment for climate change mitigation under the Paris Agreement.

However, the direct outcome of punitive duties is that European consumers are poised to encounter diminished availability of affordable, clean-energy vehicles, produced by both Chinese and European carmakers.

Now, a majority of the leading European automakers have plugged into China's EV industry chain, gaining access to a comprehensive array of cost-effective automotive components, high-quality power batteries, and state-of-the-art intelligent systems.

Within this ecosystem, Volkswagen has continued to ramp up investment in its Hefei factory to bolster research and development capabilities, while BMW is exporting the iX3 all-electric SUV, manufactured in the northeastern Chinese city of Shenyang, to the European market.

China is fostering an innovative and dynamic clean energy ecosystem that benefits not only Chinese EV manufacturers but also their European counterparts. The rewards are reciprocal.

Industrial incentives, a widely accepted international practice, are allowed by the World Trade Organization (WTO), on the condition that they follow principles of non-discrimination.

"That is the market economy. Let competition play out," said Ola Kallenius, chairman of the Board of Management of Mercedes-Benz Group. Kallenius's remarks resonated with the European automakers' collective stance: Protectionism is a short-sighted strategy that risks stifling vibrancy of clean tech market.

The corporate successes of those established auto giants have illustrated that the competition serves as a powerful catalyst for ongoing tech innovation.

Competition can also boost operational efficiency, lower expenses and drive continuous investment in infrastructure, thereby creating new jobs and nurturing broader growth potential.

A lethargic market shackled by restrictive policies will, in turn, deter the inflow of capital, innovation and employment that a burgeoning sector could otherwise generate.

Evidently, the tougher tariffs, instead of creating any level playing field, are working to wipe out this mutually beneficial competitive landscape, thus effectively slowing down the bloc's progress toward a greener future.

The lessons of history are not distant. The bloc's decision to impose anti-subsidy measures against Chinese solar panels, wafers and cells in 2013 proved to be ineffective and has been phased out since 2018.

This market-isolating practice resulted in a decline in the continent's solar cell installations. The turnover in the solar photovoltaic industry in European Union members plummeted from nearly 21.3 billion euros in 2013 to merely about 11.2 billion euros in 2017, according to statistics.

The solar power growth in Europe has been "dismal" over those years partly because of the duties, complained Stephan Singer from Climate Action Network International. Even the European Commission admitted that the repeal was in their best interests. The scenario will be similar when it comes to duties on EVs.

The pursuit of sustainable energy has emerged as a powerful driver propelling the growth of trade relations between China and Europe in recent years.

Relying on a global EV supply chain better serves EU interests. The European Commission's intention to set up more barricades risks offsetting the progress made thus far.

There is an old Chinese saying that goes like "don't let your watermelon slip away while trying to pick up a sesame seed," warning against the folly of grasping at minor gains while neglecting substantial and enduring benefits. Some EU politicians seem to be pursuing a similar path.

In their quest for immediate political gains, these politicians have chosen to ignore the long-term interests of the European people.

However, they are bound to pay for the shortsighted maneuvers once the European people get to know the truth of such political shows and the harm done to their long-term interests. ■