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🚗 🇨🇳 Our Head of the Prague office, Filip Šebok, commented for Chinese Voice of America on the EU-China trade dispute. The EU has postponed the vote, originally scheduled for Sept 25, on whether to impose tariffs of up to 35.3% on electric cars imported from China. 💬 Filip sees the dispute over electric car tariffs as one of many manifestations of rising tensions between the EU and China over trade. He notes, “Given the new European Commission's focus on improving European competitiveness, including better protecting the EU market from what it identifies as unfair practices by China, I believe these tensions will continue.” 🇪🇺 However, Filip explained, this won’t deal a fatal blow to China's interests, as some Chinese automakers will still be able to profit in the EU market, which remains more open than in the US or Canada. 🔗 Read the full article here: https://lnkd.in/esu6FgAY

He Pingli | Imposing taxes on Chinese electric vehicles will damage China-EU economic and trade relations: The EU urgently needs to act with caution The European Union is set to vote on imposing additional tariffs on electric vehicles from China, potentially reaching 35.3%. The European Commission asserts that Chinese manufacturers enjoy significant government subsidies, creating unfair competitive advantages. If 15 EU member states do not oppose the tariffs in the upcoming vote, the new tax would be enacted by the end of October, alongside the existing 10% import duty. While several EU countries support these tariffs, others, including Spain, are pushing for dialogue to avert trade conflicts. Spanish Prime Minister Sanchez has shifted from advocating for tariffs to seeking political solutions. Similarly, German leaders, including Chancellor Scholz, have expressed a desire for stable trade relations to avoid escalating tariffs. The EU aims to eliminate traditional fuel vehicles by 2035, viewing Chinese electric vehicles as crucial for its green transition. Analysts caution that imposing tariffs could impede the EU's green goals due to the slow adaptation of its domestic auto industry. Furthermore, protectionist measures are often counterproductive, worsening economic conditions without ensuring success. China has advocated for trade solutions that align with World Trade Organization standards to de-escalate tensions. A recent proposal from Chinese electric vehicle manufacturers to address EU subsidy concerns was rejected by the European Commission. Officials stress the need for a negotiated solution to prevent a trade war that could negatively impact global supply chains and climate goals. #MotiveAsia #China https://lnkd.in/g38Xsgsu

Central Bank: Risk from Trump's tariff threat to Taiwan is low, but semiconductor cluster may weaken US President-elect Trump plans to implement a tariff war, proposing tariffs of 10% to 20% on imported goods and 60% on Chinese imports. A central bank report cites the "Trump Risk Index," assessing Taiwan as low-risk for US tariffs, less so than South Korea and Japan. Taiwan's favorable position stems from military expenditure and diplomatic relations aligning with US interests regarding China. Nevertheless, concerns persist about Taiwan's semiconductor industry. If tariffs are enforced, leading to a push for manufacturing relocation to the US, Taiwan could see a dispersion of its semiconductor resources, undermining its industrial cluster. This shift could negatively impact both exports and employment in Taiwan. The International Monetary Fund warns that comprehensive tariffs could disrupt around 25% of global merchandise trade, causing increased uncertainty and economic losses. The Institute of Economics of Academia Sinica highlights the links between economic performance in the US and China and Taiwan's growth. With stable US and Chinese economies, Taiwan's growth could reach 3.2% next year. However, weak performances from these economies might reduce Taiwan's growth rate to approximately 2.93%, underscoring the potential fragility of Taiwan's economic outlook amid changing global trade dynamics. #Semiconductors #Taiwan Want more analysis of major developments in AI, semiconductors, and cloud computing in Asia? Subscribe now to the Cognitive Asia newsletter--free of charge--at Substack https://lnkd.in/g4s6bqfi https://lnkd.in/g48vdNnR

Risk Commentary: China's "Lingchi" ECFA deepens Taiwan's imbalance risks China recently announced the termination of preferential tax rates for 134 products under the ECFA, with Taiwan's Ministry of Economic Affairs downplaying the impact. However, the gradual suspension of ECFA tax rates may lead to imbalance risks in Taiwan's industry and society. The suspension of tariff reductions and preferential tariffs under ECFA could potentially affect exports, revenue, and investment in industries such as petrochemicals, machinery, auto parts, and textiles. This, combined with Taiwan's exclusion from the RCEP regional economic organization, could lead to long-term economic and industrial repercussions, potentially exacerbating social imbalance. #AsiaRisk #GeopoliticalConflictandDisputes #Taiwan Follow us for daily updates on risk and operations in Asia! https://lnkd.in/geZ9GNPT

Is there a rift in the EU because of China? BBC: Why did Germany vote against increasing tariffs on Chinese electric cars? Trade tensions between China and the EU are escalating. On October 8, China's Ministry of Commerce announced temporary anti-dumping measures against EU brandy, requiring importers to pay deposits of up to 39% to Chinese Customs. This aligns with tariffs imposed by the EU on Chinese electric vehicles (EVs). The European Commission has approved a 35% countervailing duty on imported Chinese EVs, which, combined with an existing 10% import tax, will take effect in November for five years. French officials have condemned China's actions as harmful, particularly impacting the French cognac industry. In a notable development, Germany voted against the EU's tariff increase on Chinese EVs amidst the trade dispute. This decision comes in response to China's anti-dumping investigation into EU brandy, affecting some EU members' voting behavior. While France and other nations supported the tariff bill, Germany's opposition reflects its economic interests, especially concerning its automobile sector. Experts indicate that this division within Germany undermines both its credibility and the EU's unified response to China. Germany's stance on the EU's "de-risking" strategy toward China reveals ongoing internal conflict. Despite a prior commitment to reduce dependence on China, disagreements remain. The Green Party, managing key economic ministries, leaned towards abstaining from the tariff vote, while Chancellor Olaf Scholz, influenced by the pro-business FDP, ultimately decided to oppose the increase. This choice signals Germany's prioritization of automotive interests amid rising tensions, yet appears inadequate to prevent the implementation of heightened tariffs. #MotiveAsia #Taiwan https://lnkd.in/gJY8XrXi

EU passes tariff proposal on Chinese electric cars, but Germany hopes for settlement EU member states have approved a tariff proposal to increase taxes on imported electric vehicles from China. The decision received backing from 10 member states, with 5 opposing it and 12 abstaining. Germany, whose automakers are concerned about possible trade retaliation, stood against the proposal, highlighting the potential negative impact on the European auto industry. China responded quickly by launching investigations into EU dairy products, brandy, and pork, viewed as retaliatory measures. BMW CEO Oliver Zipse and other automakers stress the need for rapid reconciliation between the EU and China to avert a trade war. The European Commission is negotiating with Chinese officials to reach a compromise, which may include a minimum sales price for Chinese electric vehicles in Europe. Amid fears of overcapacity in China, with an annual surplus of 3 million electric vehicles, there is an urgent need for resolution. With the U.S. and Canada already imposing significant tariffs, European markets are seen as a likely target for these excess vehicles. The EU continues to uphold its tariff stance despite a trend of decreasing prices for Chinese cars, raising scrutiny of the trade tensions and their impact on the global automotive industry. #MotiveAsia #Taiwan https://lnkd.in/gg7jEifs

China’s Overcapacity and Economic Malaise   #China’s recent economic woes have made headlines covering everything from #realestate to #debt, but Janet Yellen’s recent visit to China and her focus on China’s overcapacity and its tie-in with tariffs has captured headlines.   I was delighted to be interviewed by Voice of America's Bo Gu on this latest development in Sino-#American rivalry and Industrial Policy.   China’s # export-oriented economy not only usually has an incentive to export, but even if there was an incentive to decrease exports, #Chinese State Owned Enterprises, local #government, and much of the over-leveraged private sector have every incentive to maintain full speed ahead.   The result? Two parallel problems: 1) A collective action problem (ironic given that Command Economies of many types argue they have few difficulties with collective action problems) and 2) A free rider problem with everyone hoping somebody else pulls back.   For more details, and how this is likely to end, please see my latest in Voice of America.   https://lnkd.in/eMG_Z32z

China Chamber of Mechanical and Electrical Commerce responds to the final ruling of the EU's anti-subsidy investigation on Chinese electric vehicles Beijing's China Chamber of Commerce for Import and Export of Machinery and Electronic Products expressed strong disapproval of the European Commission's final ruling on its anti-subsidy investigation into Chinese electric vehicles, stating on October 30 that the ruling contained many inaccuracies and lacked transparency. The chamber criticized the EU's sampling methods and analysis, arguing that these led to baseless conclusions about the impact on the EU industry. The chamber has represented 12 major Chinese electric vehicle firms during the investigation, contributing multiple defense opinions and participating in hearings in Europe. They sought to clarify concerns regarding the legality and transparency of the investigation, but the EU upheld its high anti-subsidy tariffs, citing flawed analyses and ignoring relevant WTO and EU regulations. In response to the preliminary ruling, the China Chamber of Commerce submitted a price commitment plan in August but has faced ongoing significant differences with the EU despite multiple consultations. The chamber remains hopeful for a balanced resolution that emphasizes mutual understanding and cooperation in future discussions. #MotiveAsia #China https://lnkd.in/gDf6D9KG

China can evade US tariffs by transshoring to Mexico. Tariffs on China should apply to its companies, regardless of where they locate their factories. https://lnkd.in/eUuUCuYa

Trump warns Taiwan chip tariffs "may reach 100%" Presidential Office: Taiwan and the United States have close relations and create a win-win situation U.S. President Trump is contemplating imposing tariffs of up to 100% on computer chips from Taiwan, targeting the country's dominant position in the global chip market, where it accounts for 98%. This move would extend existing tariffs on Chinese electronic products, as part of Trump's strategy to bring semiconductor production back to the U.S. Taiwan's Ministry of Economic Affairs responded by highlighting the complementary nature of the high-tech industries in both Taiwan and the U.S. Presidential Office spokesperson Kuo Yahui emphasized the enduring cooperation and trust in the semiconductor sector and affirmed Taiwan's commitment to closely monitor U.S. policies while fostering collaboration to address global challenges. Trump's approach represents a departure from former President Biden's CHIPS and Science Act, which allocated over $52 billion to boost domestic semiconductor manufacturing. Trump criticized Biden's strategy, expressing a preference for incentives over subsidies, aiming to discourage imports from Taiwan and promote domestic production. #Semiconductors #Taiwan https://lnkd.in/dFwgfMe7