China to impose import tariffs on EU cars?

A report in French financial magazine Les Echos suggests that the Chinese Government is considering imposing an additional tariff on cars imported from the EU. The report was picked up by analysts Morgan Stanley, who suggest that the new tariff could be in response to the recently-announced 11 per cent tariff by the EU on Chinese-made solar panels. ACEA, the EU car association, says that the car tariff could be in place as early as September.

The tariff would apply to cars with engines of 2 litres and upwards and it would particularly affect German car manufacturers. The percentage of China sales imported for these companies are as follows: VW: 15 per cent, BMW: 50 per cent and Mercedes: 55 per cent.

The BMW X3, X5 and X6 and the Mercedes ML are made in the USA, so would not be subject to the tariff, which means that the main models affected would be the BMW 6 and 7 series and the Mercedes S-class. In fact, the timing for Mercedes could hardly be worse, as September is around two months before the company launches the S-class in China and all S-class models have engines of at least 2 litres and all are made in Germany.