According to the latest information, the potential for increased customs duties on European-made vehicles is rising amid reports that China is ready to impose tariffs of up to 25% on imported vehicles with high-displacement engines.
This information emerged amidst escalating trade disputes between the United States and the European Union.
Bloomberg reported on Tuesday that the official account of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products on the social media platform X (formerly known as Twitter) posted a message stating that undisclosed sources had informed them that China could “temporarily increase tariffs on European vehicles with high-displacement engines.”
The next message stated, “The Chamber believes that this information is of great importance for trade and economic relations between China and the EU.”
Following this announcement, European car manufacturers saw a decline in their stock prices, with shares of Mercedes-Benz Group AG (MBGYY) and BMW AG (BMWYY) experiencing a drop of over 2% on Wednesday. Volkswagen AG (VWAGY) shares also saw a decline of over 1%.
Responding to the news, analysts at Morgan Stanley expressed the view that these reports bring “further uncertainty about the future of tariffs on new vehicles between the EU and China, with the possibility of trade barriers increasing rapidly.”
“The financial institution continued: “In our assessment, any adjustment in the tariff structure would benefit Renault and Stellantis compared to German car manufacturers when all other factors are equal.” “This is because both companies derive a significant portion of their revenues from Europe and have very little business in China.”
“This reinforces our cautious stance towards German car manufacturers, consistent with our most recent in-depth analysis of the sector, including assigning lower investment ratings to Porsche and Volkswagen.”
Source: investing.com
