Polish industry is concerned about EU tariffs imposed on China

Wikimedia Commons/CC BY-SA 4.0 Author: Tomás Freres
Public charging park in Germany.

The Association of Automotive Parts Distributors and Manufacturers (SDCM) of Poland has raised concerns about the potential impact of a trade dispute between China and Europe. This concern stems from the European Commission’s decision to increase customs duties on Chinese electric vehicles temporarily. The automotive industry in Poland, particularly the production of parts valued at nearly PLN 123 billion (approximately 30 billion euros) annually, could be significantly affected by this trade conflict.

The European Union’s decision to impose new tariffs on Chinese-made electric vehicles follows preliminary findings of an ongoing investigation, which revealed that China provides subsidies to electric vehicle producers. The EU has deemed this practice unfair and distorting of competition. The EU is worried that importing Chinese electric vehicles could harm European companies due to the advantage gained by the lower prices of Chinese products. Unless the EU and China resolve this, these tariffs will become mandatory starting from July 4th.

The Polish industry is among the top exporters

According to data from the Central Statistical Office, the production of automotive parts and components in Poland was valued at nearly PLN 123 billion in 2023. According to information published by World’s Top Exports (WTEx), Poland ranks 7th in the world for parts exports, with a value of over USD 15 billion sent to foreign markets. This accounts for 3.6% of global parts exports.

Tomasz Bębno, the president of SDCM and a member of the management board of the European Association of Automotive Parts Manufacturers CLEPA, warns that the European Commission’s decision to impose higher customs duties on electric cars imported from China may lead to a trade war with negative consequences for European parts producers, including those in Poland. He emphasised that imposing punitive tariffs on Chinese electric cars at a critical moment for the European automotive industry could have detrimental effects.

“The last thing we need is a trade war that will also affect companies operating in Poland. This action is a double-edged sword, and we may quickly regret this decision. We are a highly globalised industry, so unfortunately, we will feel the effects of possible retaliatory measures from China. If, for example, there is a breakdown in supply chains, which affects the production of European vehicle manufacturers, the Polish manufacturers supplying parts will lose demand for their products – the president of SDCM told PAP.

The Association of Automotive Parts Distributors and Manufacturers includes over 250 of the largest brands in the automotive parts industry and market. It represents the sector’s interests, trade, and services worth nearly PLN 140 billion (approximately 35 billion euros) annually, creating over 330,000 jobs.

The European CLEPA calls to make the EU more competitive

The European automotive industry is experiencing its most significant transformation in history, as highlighted by the Association of Automotive Parts Distributors and Manufacturers (CLEPA). According to the EU, the sector is mandated to transition to zero-emission drives, which include pure battery vehicles (BEV) and hydrogen vehicles (FCEV). However, social acceptance, charging infrastructure, and pricing challenges continue to impact the industry’s progress, affecting overall demand and market conditions.

“The European Commission is right to be concerned about the competitiveness of the EU as a manufacturing hub and the challenges posed by Chinese manufacturers, but tariffs can only provide a temporary respite and bear the risk of retaliation,” Benjamin Krieger, Secretary General of CLEPA, stated.  

“Global trade requires a level-playing field and may necessitate corrective measures. However, protectionism cannot be the answer to restoring European competitiveness. Consolidated efforts are needed to make the EU attractive again for investment,” Krieger emphasised. 

China’s automotive market makes up a third of the global industry. Many European suppliers provide components and systems to both international and Chinese automakers. Even Chinese-built BEVs often use components and technologies made by European suppliers. Vehicle manufacturers and suppliers are speeding up product development cycles and investing around €70 billion annually in R&D to strengthen their competitive edge.

“Europe’s main challenge is not a lack of innovative capacity but rather high energy costs, regulatory incoherence, and limited access to capital and public funding, which increasingly lead to innovations being manufactured abroad,” CLEPA’s Secretary General added.

“Instead of relying on protectionist measures that could hamper European companies’ access to crucial markets, EU policymakers should focus on making the EU more competitive, suggests Krieger.  

At the same time, China produces much cheaper electric vehicles. For many in Europe, comparing the prices of cars from the EU and China makes the choice easy, so sales of vehicles from Chinese manufacturers increase. The European Commission looked into whether the conditions were equal for all players in this case. China’s automotive market accounts for one-third of the global automotive industry, with many European parts manufacturers supplying components and systems to both international and Chinese carmakers. Even BEVs manufactured in China often contain many components and technologies produced by European suppliers, informs CLEPA.

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