China: "US Tariffs Violate WTO Agreement... Will Take All Necessary Measures"

Automobile Association Vice Chairman: "A Typical Case of Protectionism"

As the United States is about to announce its tariff imposition policy on key strategic industries such as Chinese-made electric vehicles, opposition to this is spreading within China. The industry has raised its voice in criticism, calling it a typical case of protectionism, and the government has also hinted at retaliatory tariffs, stating that it will take all necessary measures to protect its national interests.

On the 14th, China Daily, a state-run media outlet, published an interview with Pu Bingfeng, Vice Chairman of the China Association of Automobile Manufacturers. Pu stated, "The U.S. exaggerating the overcapacity of China's new energy vehicle industry and expressing national security concerns over Chinese electric vehicles is typical protectionism," adding, "The new energy industry is a creation of humanity collectively and can bring shared benefits to mankind." Vice Chairman Pu criticized, "Restricting access to the U.S. market is very unreasonable."

[Image source=Reuters Yonhap News]

He also refuted the U.S. claim of 'overproduction' with figures. According to the National Bureau of Statistics, the operating rate of Chinese automobile manufacturing in the fourth quarter of last year was 76.9%, which is a reasonable level compared to the industry's 'normal operating range' of 70-90%," he explained.

Economic media outlet Caijing cited Sun Lei, Senior Partner at Beijing Dacheng Law Offices, who said, "The U.S. approach to raising tariffs violates World Trade Organization (WTO) agreements," and pointed out, "Especially if tariffs are imposed only on China, it violates the WTO's Most-Favored-Nation principle." Senior Partner Sun added, "The WTO stipulates that the same principles must be applied to all member countries."

Jake Sullivan, White House National Security Advisor, stated on the 13th (local time) that U.S. President Joe Biden is expected to soon announce tariffs on Chinese products. The targeted sectors are expected to include strategic industries such as electric vehicles, batteries, and semiconductors.

In China, it is anticipated that the tariff rate on electric vehicles will increase from the current 25% to 100%, and an additional 2.5% tariff will be imposed on all automobiles imported into the U.S. As a result, tariffs on electric vehicles exported from China to the U.S. would rise from the current 27.5% to 102.5%. Caijing reported, citing sources, that this tariff regulation will not apply to traditional internal combustion engine vehicles.

On the 10th, Chinese Foreign Ministry spokesperson Lin Zhen said regarding the U.S. additional tariff policy, "It seriously disrupts normal economic and trade exchanges between China and the U.S.," and urged, "The U.S. should faithfully comply with WTO regulations and cancel the tariff increases as well as all additional tariffs imposed on China." Spokesperson Lin emphasized, "China will take all necessary measures to protect its national interests."