Eurobloat #0174 • October 2024
October was the month the great free-trade project rediscovered protectionism, slapping heavy tariffs on the cheap electric cars Europeans actually want to buy, overruling its biggest member to do it, and somehow undercutting its own climate goals in the bargain.
Folly of the Month: taxing the affordable electric car
On 4 October the Commission won a vote to impose definitive tariffs of up to around 45 per cent on Chinese electric vehicles, in force from the end of the month. The bloc that lectures the world about open markets and the green transition chose to make clean cars more expensive for its own citizens, picked a trade fight with Beijing, and split itself down the middle to do it. Protectionism dressed as an anti-subsidy measure is still protectionism, and the bill lands on the European driver.
→ cnbc.com → euronews.com
1. A divided bloc, overruled into "unity"
The vote split ten in favour, five against and twelve abstaining, which is to say a clear majority of member states declined to back it. Brussels imposed the tariffs anyway, calling a result that commanded no real consensus a decision.
2. Germany said no, and was ignored
Germany, home to the Union's car industry, voted against, fearing for its exporters, and was simply overridden. When the largest economy's no counts for nothing, "ever closer union" starts to look like something else.
3. Dearer clean cars, courtesy of Brussels
The tariffs run as high as the mid-thirties of per cent for some makers, straight onto the price of an electric car. The citizen told to go green is now charged extra for doing so.
4. A trade war, with your dinner in the crossfire
Beijing lined up retaliation against EU brandy, pork and dairy. Brussels picks the fight; European farmers and distillers brace for the punch.
5. The green paradox, scored own goal
Analysts pointed out that taxing the cheapest electric vehicles slows the very transition the EU claims is an existential priority. Two flagship goals, free trade and decarbonisation, sacrificed at once to protect incumbents.
6. Anti-subsidy crusaders, generously subsidised
There is a particular cheek in a bloc that showers its own industries with state aid and green subsidies posing as the scourge of unfair support abroad. The rules against subsidy apply, as ever, to other people.
7. The deforestation law, delayed before it began
Also in October, Brussels proposed delaying its deforestation regulation by a year after partners warned they could not possibly comply in time. A flagship law unworkable on its own deadline is a flagship law that should never have set that deadline.
→ lw.com
8. The Commission, overriding the capitals
The episode showed the Commission pressing ahead despite the absence of a genuine member-state majority behind it. Power that needs no real consent is power that has stopped asking.
9. Free trade for me, tariffs for thee
A Union founded on the gospel of open markets spent October building walls around them. The principles are firm right up until an incumbent industry feels a draught.
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