EV/Lithium, page-652

...lithium hodlers need to hope that China's counter proposal is accepted by EU.

...if EU tariffs on Chinese EVs can be averted, that can pave the way for EV growth in EU from China-made EVs, which in turn will increase demand for lithium in China, helping starve the present lithium price decline that is gaining momentum.

...this will be a test of ideology vs pragmatism, the German auto makers want the latter, politicians the former.
China Floats Perks for German Carmakers in Bid to Stop EV Levies

• Beijing proposes lowering levy on large cars: people familiar
• Move designed to appeal to luxury automakers in Germany

By Kamil Kowalcze and Alberto Nardelli
June 24, 2024 at 8:36 PM GMT+10



Beijing has suggested Germany’s luxury car manufacturers could benefit if Berlin convinces the European Union to drop tariffs on Chinese electric vehicle exports, according to people familiar with the matter.

China floated lowering its existing tariffs on large-engine cars in return for scrapping planned EV levies on imports from the Asian nation, said the people, who spoke on condition of anonymity to discuss private talks. Beijing currently imposes a 15% fee on passenger vehicles from the bloc.
China’s Commerce Minister Wang Wentao hinted at the possibility of the advantages to his German counterpart Robert Habeck during a meeting on Saturday in Beijing, one of the people said. His three-day visit to the world’s No. 2 economy came weeks after the EU proposed hiking charges on electric cars to as high as 48% later this year.

China and the European Union have agreed to begin talks on the bloc’s plans to impose tariffs on Chinese electric vehicles. Minmin Low reports on Bloomberg Television.

The exchange reflects a mismatch between how the EU and China are approaching the dispute. The European Commission says it’s setting tariffs based on the legal conclusions of an in-depth study into Beijing’s massive state subsidies. The levies look to level the playing field by offsetting the Chinese aid with something of equal value.
But that legal exercise was always vulnerable to political pressure, and President Xi Jinping’s government has been dangling both carrots and sticks to persuade Berlin to help it horse-trade. Beijing had previously signaled it could unleash a 25% fee on large European cars, a move that would hit German luxury carmakers including Mercedes-Benz Group AG and BMW AG.

The danger for the commission is Berlin — which already opposes the tariffs — might be persuaded by its massive auto industry to break rank and pressure the bloc’s executive arm and other member states, by using its weight as the EU’s biggest economy.

The European Commission and China’s Ministry of Commerce didn’t reply to requests for comment. Germany’s Economy Ministry declined to confirm Wang’s comments.
Subsidies Per Electric Vehicle Are Declining in China

Source: CSIS analysis
Officials in Beijing still have some room left for negotiation, according to Deborah Elms, head of trade policy at the Hinrich Foundation.“The EU could always opt to postpone the imposition of tariffs, pending the outcome of negotiations,” she added. “As long as the two sides are making sufficient progress towards an answer, it’s possible to stop the clock.”

The bartering in Beijing came as the EU’s trade chief Valdis Dombrovskis held a “candid and constructive” video call with his Chinese counterpart over the weekend. Senior officials from the two sides have barely spoken to each other during the probe.

“The two sides agreed to engage on the basis of facts and in full respect of WTO rules,” said Olof Gill, a European Commission spokesperson. “The EU side emphasized that any negotiated outcome to its investigation must be effective in addressing the injurious subsidization.”

For China, stopping the tariffs could send an important signal to other major economies. Canada is now also mulling potential fees on Chinese EVs in order to align with actions taken by the EU and US, where President Joe Biden has announced a 100% charge on such products.