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Chinese electric car makers hit with new European Union tariffs

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By João da SilvaBusiness reporter

Getty Images Visitors look at MG4 on display at electric vehicle fair in Spain.Getty Images

MG owner SAIC is one the car makers hardest hit by the new tariffs

The European Union has raised tariffs on Chinese electric vehicles, as Brussels takes action to protect the bloc’s motor industry.

The new tariffs on individual manufactures range from 17.4% to 37.6%, which is on top of a 10% duty that was already in place for all electric cars imported from China.

This could raise the price of EVs across the EU, making them less affordable for European consumers.

The move is also a major blow for Beijing, which is already in a trade war with Washington. The EU is the largest overseas market for China’s EV industry and the country is counting on high-tech products to help revive its flagging economy.

EU officials say this rise in imports was boosted by “unfair subsidisation”, which allowed China-made EVs to be sold at much lower prices than ones produced in the bloc.

China has denied this repeated allegation from the US and the EU: Beijing is subsidising excess production to flood western markets with cheap imports.

The new charges come into effect on Friday but are currently provisional while the investigation into Chinese state support for the country’s EV makers continues. They are not likely to be imposed until later this year.

So who are the potential winners and losers in this trade dispute?

It is not just Chinese brands that are affected by the move. Western firms that make cars in China have also come under scrutiny by Brussels.

By imposing tariffs, Brussels says it is attempting to correct what it sees as a distorted market. The EU’s decision may seem tame compared to a recent US move to raise its total tariffs to 100%, but it could be far more consequential. Chinese EVs are a relatively rare sight on US roads but much more common in the EU.

The number of EVs sold by Chinese brands across the EU rose from just 0.4% of the total EV market in 2019 to almost 8% last year, according to figures from the influential Brussels-based green group Transport and Environment (T&E).

Patryk Krupcala, an architect from Poland, who expects to take delivery of a brand new China-made MG4 in two weeks told the BBC: “I have chosen an MG4 because it is quite cheap. It is a really fast car and it’s a rear-wheel drive like my previous car which was BMW E46.”

T&E projects firms like BYD and Shanghai Automotive Industry Corporation (SAIC), the Chinese owner of the formerly British brand MG, could reach a market share of 20% by 2027.

But not all Chinese-made EVs will be hit equally by the new tariffs.

Winners and losers

They were calculated based on estimates of how much state aid each firm received, while companies that cooperated with the probe saw the duties they were hit with cut. Based on these criteria, the European Commission has set individual duties on three Chinese EV brands – SAIC, BYD and Geely.

SAIC has been hit with the highest new tariff of 37.6%. State-owned SAIC is the Chinese partner of Volkswagen and General Motors. It also owns MG, which produces one of the top-selling EVs in Europe, the MG4.

“The price for not cooperating is a severe blow to SAIC, which gets 15.4% of its global revenues from EV sales in Europe,” says Rhodium Group, an independent research firm.

For Mr Krupcala, who bought his MG4 before the tariffs hit, the EU’s move does not matter much: “I don’t really care about the tariffs. I have a nice car with a seven-year warranty.”

For China’s largest EV maker, BYD, it is a different story, as it faces an extra duty of 17.4% on the vehicles it ships from China to the EU.

That is the lowest increase and one that, according to research by Dutch bank ING will “give the automaker an advantage in the European market”.

Luís Filipe Costa, an insurance industry executive from Portugal, who has just bought a BYD Seal, says price was one of the deciding factors when he chose his new car.

But, he added that even if the European Commission’s new tariffs had already been in place he would still have gone with BYD because “other brands would also be affected”.

Portuguese business executive Luis Costa standing next to his BYD Seal.

Portuguese executive Luís Filipe Costa chose a BYD Seal over Western brands

Geely, which owns Sweden’s Volvo, will see an additional tariff of 19.9%.

According to Spanish bank BBVA, the company will “still export to the EU profitably” but “its profits will be significantly reduced.”

Other firms, including European car makers operating factories in China or through joint ventures, will also have to pay more to bring electric cars into the EU.

Those deemed to have cooperated with the probe will face an extra duty of 20.8%, while those EU investigators see as non-cooperative will pay the higher tariff of 37.6%.

US-based Tesla, which is the biggest exporter of electric vehicles from China to Europe, has asked for an individually calculated rate which EU officials have said will be determined at the end of the investigation.

Still, the firm has posted a notice on some of its European websites, that prices for its Shanghai-made Model 3 could increase due to the new tariffs.

Last year, businessman Lars Koopmann, who lives in the motor industry powerhouse that is Germany, bought a China-made Tesla Model Y.

Mr Koopmann says he particularly enjoyed the car’s high-tech features, such as the large touch screen.

“Price was also a big factor that set it apart from premium German brands,” Mr Koopmann says.

“If the tariffs had been in place, they would have always affected my decision.”

Localising production

While some China-based exporters will be better off than others, it is clear from the European Commission’s plans that all of them will be facing higher costs when shipping to Europe.

The hardest hit “will be SAIC brands like MG… as well as joint ventures between foreign and Chinese firms in China, which often have narrower profit margins on the cars they export to Europe,” Rhodium says.

“The biggest beneficiaries of the duties are European-based producers with limited China exposure, such as Renault.”

In other words, the duties are likely to do as the EU hopes they would – cut the number of Chinese-made EVs coming into the region, easing pressure on local manufacturers.

There is also another result of the move – some big Chinese EV firms are planning to build production capacity in the EU, which could help shield them from the new duties.

Work on BYD’s first European factory is well under way in Hungary and production is expected to begin there by the end of next year.

Chinese car maker, Chery, has recently signed a joint-venture deal with a Spanish firm that will see the two companies making EVs and other types of cars in Barcelona.

And, SAIC is looking to secure a site for its first factory in Europe.

“It’s a well architected plan to encourage companies to shift their investments to the EU, instead of relying on exporting from China,” said Bill Russo, from Shanghai-based consulting group Automobility.

“The fact that some companies are taxed higher than others is a signal that they will make the penalty higher or lower based on the degree the company is committed to investing in the EU.”

The Chinese government placed its bet on EVs early on.

According to the Center for Strategic and International Studies, between 2009 and 2023 more than $230bn (£181bn) of state support was pumped into the industry.

As a result its EV industry has become world leading.

The International Energy Agency says China accounted for more than 60% of the world’s new electric car sales last year.

While the vast majority of EVs produced in China are sold domestically, overseas markets, and particularly Europe, have become increasingly important.

“Exports are the profitable segment,” said Rhodium’s senior analyst, Gregor Sebastian.

“The EU tariffs will hurt China’s EV industry because these exports help recover losses from China’s domestic price war.”

Meanwhile, the world’s second largest economy is struggling to shake off an economic slowdown in the wake of the pandemic and an ongoing property crisis.

Faced with lower domestic consumption and investment levels, China is trying to “export its way out” of the slump, says Alicia Garcia-Herrero, chief economist for the Asia Pacific region at investment bank Natixis.

And Beijing is placing yet another large bet on EVs by making the industry one of its “New Three” growth drivers – a government blueprint for reviving the economy that also relies on exports of batteries and renewable energy.

However, with major markets like the US, the EU and others imposing tariffs and other barriers, it looks like China’s latest gamble could deepen trade tensions with some of its largest trading partners.



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Biden seeks boost in Pennsylvania as calls for him to step aside mount By Reuters

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By Andrea Shalal

HARRISBURG, Pennsylvania (Reuters) – An embattled U.S. President Joe Biden faced escalating pressure from fellow Democrats worried about his candidacy on Sunday, concerns he worked to ease with campaign stops in the battleground state of Pennsylvania.

Biden, 81, faces growing calls to end his reelection bid after a halting performance in a June 27 debate with Republican Donald Trump, 78, raised questions about his ability to do the job for another four years. He has vowed to stay in the race, dismissing calls for him to drop out as “nonsense” in a fundraising email on Saturday.

On Sunday, the Democratic president received a warm welcome at a Black church in Philadelphia and later traveled to the Pennsylvania state capital, Harrisburg, for an event with union members. Black voters are a critical part of Biden’s base of support and recent public opinion polling has shown their support for him softening.

On a leadership call on Sunday called by House Democratic Leader Hakeem Jeffries, some House Democrats said that Biden should step aside as presidential candidate, a source familiar with the discussions told Reuters.

Representatives Jerrold Nadler, Adam Smith, Mark Takano and Joe Morelle, senior House Democrats who sit on the Judiciary, Armed Services, Veterans Affairs and House Administration committees, were among those who called on Biden to step aside, according to media reports.

Democrats also suggested that Vice President Kamala Harris, seen as the likeliest candidate to replace Biden in the Nov. 5 election were he to bow out, could perform well.

The coming week is crucial, Democratic Senator Chris Murphy said on CNN’s “State of the Union.” He encouraged the president to hold a town hall or news conference to convince voters he is “the old Joe Biden.”

“The president needs to do more,” Murphy said. “I do think the clock is ticking.”

Democratic U.S. Representative Adam Schiff said on NBC’s “Meet the Press” that Biden needs to move swiftly to put concerns to rest.

He added that he believed Harris “could win overwhelmingly, but before we get into a decision about who else it should be, the president needs to make a decision about whether it’s him.”

Asked in Harrisburg whether the Democratic Party was behind him, Biden told reporters “yes.”

‘NEVER COUNT JOSEPH OUT’

In Philadelphia, churchgoers at the Mt Airy Church of God in Christ gave Biden a rousing welcome. Bishop Louis Felton praised him as “a man of vision and integrity.”

The bishop, referring to Biden’s Republican challenger without naming him, chided those who “make an issue of the president – that he is conditioned with stammering and not being able at certain times to bring forth words – while another person lies fluidly and you never challenge his lies.”

“Never count Joseph out,” Felton thundered. “Go, Joseph, you can make it.”

Biden addressed the congregation for a little more than six minutes, saying, “We must unite America again. That’s what I’m going to do.”

Carla Greene, a resident of Philadelphia, said she hoped Biden felt the support, adding, “we believe he is the man for the job.”

In a Friday interview with ABC News, Biden said only the “Lord Almighty” could persuade him to drop out, dismissing the prospect that Democratic leaders could join forces to try to talk him into standing down.

A Democratic National Committee member from Florida, Alan Clendenin, joined calls urging Biden to step aside on Sunday.

“Joe Biden will be remembered by historians as one of the finest presidents in American history, but this election is about the next four years, not the last three and a half,” Clendenin said.

The DNC has steadfastly supported Biden since his debate stumbles so any defections could suggest a deepening of the crisis. DNC Chair Jaime Harrison said on Sunday that Biden remains the party’s nominee. “The primary is over,” he said.

CRITICAL STATE

Biden stopped at a local campaign headquarters after church, telling supporters there, “Pennsylvania is a critically important state.”

Accompanying Biden, Democratic Senator John Fetterman bellowed, “There is only one person in the country that’s ever kicked Trump’s ass in an election and that is your president.”

Biden also met briefly with Pennsylvania’s Democratic Governor Josh Shapiro.

Pennsylvania is one of the half dozen or so states alongside Wisconsin and Michigan that can swing Democratic or Republican and are expected to determine the outcome of what has been a tight race.

Sunday’s trip – Biden’s 10th to Pennsylvania during the 2024 election campaign – is part of a July voter outreach blitz by the Democratic Party that includes a $50 million media campaign aimed at events, such as the Olympics, and travel by the president, the first lady, Harris and her husband to multiple battleground states.

Pressure from Congress is expected to ramp up in the coming days as lawmakers return to Washington from a holiday recess and donors mull their willingness to keep funding Biden’s campaign.

Biden is also preparing to host dozens of world leaders at a NATO summit in Washington this week and hold a rare solo news conference.

Five U.S. lawmakers have publicly called for Biden to end his reelection bid, including Representative Angie Craig of Minnesota, the first Democratic member of the House of Representatives from a battleground district, with others said to be poised to join in.

Two letters are circulating among House Democrats calling for Biden to step aside, House Democratic sources have said.

U.S. Senator Mark Warner of Virginia invited fellow senators to a meeting on Monday to discuss Biden’s campaign.

© Reuters. U.S. President Joe Biden delivers remarks at a church service at Mt Airy Church of God In Christ in Philadelphia, Pennsylvania, U.S., July 7, 2024. REUTERS/Nathan Howard

Senator Bernie Sanders, 82, who has run for the Democratic nomination for president in the past, stood firmly in Biden’s camp on Sunday, saying Democrats’ focus should be on policy.

“This is not a beauty contest,” he said on CBS’ “Face the Nation.”





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Leftwing surge thwarts far right in French election, polls suggest

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France’s anti far-right alliance is on track to halt the rise of Marine Le Pen’s Rassemblement National, in a snap parliamentary election that leaves the Eurozone’s second-largest economy in limbo over its next government.

Provisional estimates from four pollsters suggest the RN, which was hoping to secure an outright majority in the National Assembly, may have been pushed into second or third place by a surge in support for the left.

The projections suggest the leftwing alliance Nouveau Front Populaire (NFP) could become the largest parliamentary force with anywhere from 170 to 215 seats, according to Ipsos, Ifop, OpinionWay and Elabe.

But President Emmanuel Macron’s centrists were running close behind, with pollsters predicting ranges of 140 to 180 seats, a big drop from the roughly 250 they held in the outgoing National Assembly.

No single bloc has come close to securing an outright parliamentary majority, according to the estimates.

The projections come after the NFP was hastily formed between the far left La France Insoumise (LFI), the centrist Parti Socialiste (PS), the Communists and Greens a month ago, to help block the RN from power.

There were gasps of horror and tears at the RN electoral party as the first results estimates came in on Sunday.

A stunned silence replaced flag waving and chants that came after last week’s first round in the parliamentary election.

Jean-Luc Mélenchon, chief of the hard left LFI, has called on Macron to offer the NFP the opportunity to form a government. “The will of the people must be strictly respected . . . The defeat of the president and his coalition is confirmed,” he said.

The polls were met with elation at the PS election event in Belleville, Paris, with chants of “front populaire” and a round of La Marseillaise.

“It’s brilliant, of course it’s brilliant,” Nicolas Mayer-Rossignol, the PS mayor of Rouen and a leading figure in the party, told the Financial Times.

The projected results suggest that the co-ordinated anti-RN strategy, under which the left and centre tactically withdrew their candidates from run-off ballots, had paid off.

After the first round, Le Pen was confidently predicting that a governing majority was within the RN’s reach.

Marine Le Pen had high hopes for the results of the election © Yoan Valat/EPA-EFE/Shutterstock

If confirmed in final voting tallies, the projections suggest that none of the three main blocs will be able easily to command a governing majority, potentially leaving France in a period of political gridlock.

The uncertainty will have repercussions both for France and the EU, given Paris’ outsized role in influencing the bloc’s policy, together with Germany.

Financial markets had been jittery before the first round when the RN was polling strongly, but have since calmed as a hung parliament appeared more likely.

The NFP has proposed a heavy tax-and-spend economic programme, which would be a major break with Macron’s business friendly agenda and tax-cutting zeal.

In the French system, the president chooses the prime minister, who typically comes from the party with the biggest delegation in the National Assembly even if it does not have an outright majority. 

Macron could seek to cobble together a coalition of MPs from different parties on the left, centre and right, but excluding the RN and the far-left LFI.

Such an arrangement would amount to a “cohabitation”, and forging this kind of deal might prove difficult given the parties’ wide policy differences. 

Jordan Bardella, 28-year-old president of the RN © Benoit Tessier/Reuters

A last resort would be naming a technocratic government to be led by an experienced but non-partisan figure, although this is not at all in the French political tradition. 

While the pollsters’ projections are far better than expected for Macron, his authority will still emerge weakened from the snap election.

Macron in June took a gamble in calling for the early vote after his centrist Ensemble alliance was trounced by Le Pen’s RN in European parliamentary elections.

The president defended the move, which stunned and angered many even in his own camp, as a necessary moment of “clarification”.

Bernard Sananes, head of Elabe, said: “It’s the victory of the Republican Front. Vote transfers have been excellent. Where the RN was in the second round, turnout increased.”



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Alaska’s capital could ban cruise ships on Saturdays

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Each year, a crush of tourists arrives in Alaska’s capital city on cruise ships to see wonders like the fast-diminishing Mendenhall Glacier. Now, long-simmering tensions over Juneau’s tourism boom are coming to a head over a new voter initiative aimed at giving residents a respite from the influx.

A measure that would ban cruise ships with 250 or more passengers from docking in Juneau on Saturdays qualified for the Oct. 1 municipal ballot, setting the stage for a debate about how much tourism is too much in a city that is experiencing first-hand the impacts of climate change. The measure would also ban ships on July 4, a day when locals flock to a downtown parade.

The “ship-free Saturdays” initiative that qualified this week will go to voters unless the local Assembly enacts a similar measure by Aug. 15, which is seen as unlikely.

Juneau, accessible only by water or air, is home to the Mendenhall Glacier, a major draw for the cruise passengers who arrive on multi-story ships towering over parts of the modest downtown skyline. Many residents of this city of about 32,000 have concerns about increased traffic, congested trails and the frequent buzz of sight-seeing helicopters transporting visitors to the Mendenhall and other glaciers.

Deborah Craig, who has lived in Juneau for decades, supports ship-free Saturdays. Craig, who lives across the channel from where the ships dock, often hears their early-morning fog horns and broadcast announcements made to passengers that are audible across the water.

The current “overwhelming” number of visitors diminishes what residents love so much about Juneau, she said.

“It’s about preserving the lifestyle that keeps us in Juneau, which is about clean air, clean water, pristine environment and easy access to trails, easy access to water sports and nature,” she said of the initiative.

“There’s this perception that some people are not welcoming of tourists, and that’s not the case at all,” Craig said. “It’s about volume. It’s about too much — too many in a short period of time overwhelming a small community.”

The current cruise season runs from early April to late October.

Opponents of the initiative say limiting dockings will hurt local businesses that rely heavily on tourism and could invite lawsuits. A voter-approved limiton cruise passenger numbers in Bar Harbor, Maine, another community with a significant tourism economy, was challenged in federal court.

Laura McDonnell, a business leader who owns Caribou Crossings, a gift shop in Juneau’s downtown tourist core, said she makes 98% of her annual revenue during the summer season.

Tourism is about all the “local businesses that rely on cruise passengers and our place in the community,” said McDonnell, who is involved in Protect Juneau’s Future, which opposes the initiative.

Some schools recently closed due to factors including declining enrollment, while the regional economy faces challenges, she said.

“I think that as a community, we really need to look at what’s at stake for our economy,” she said. “We are not in a position to be shrinking our economy.”

The cruise industry accounted for $375 million in direct spending in Juneau in 2023, most of that attributable to spending by passengers, according to a report prepared for the city by McKinley Research Group LLC.

After a two-year pandemic lull, cruise passenger numbers rose sharply in Juneau, hitting a record of more than 1.6 million in 2023. Under this year’s schedule, Sept. 21 will be the first day since early May with no large ships in town.

The tourism debate is polarizing, and the city has been trying to find a middle ground, said Alexandra Pierce, Juneau’s visitor industry director. But she noted there also needs to be a regional solution.

If the Juneau initiative passes, it will impact other, smaller communities in southeast Alaska because the ships, generally on trips originating in Seattle or Vancouver, Canada, will have to go somewhere if they can’t dock in Juneau on Saturdays, she said.

Some residents in Sitka, south of Juneau, are in the early stages of trying to limit cruise visitation to that small, island community, which is near a volcano.

Juneau and major cruise lines, including Carnival Corp., Disney Cruise Line, Norwegian Cruise Line and Royal Caribbean Group, agreed to a limit of five large ships a day, which took effect this year. They more recently signed a pact, set to take effect in 2026, seeking a daily limit of 16,000 cruise passengers Sundays through Fridays and 12,000 on Saturdays.

Pierce said the overall goal is to keep total cruise passenger visitation around 1.6 million, and to even out daily numbers of visitors that can spike to about 18,000 on the busiest days. Peak days in the past have felt “a bit suffocating,” she said. Juneau traditionally has been the most popular cruise port in the state.

A number of projects around Juneau are expected to help make existing cruise numbers feel less impactful. Those include plans for a gondola at the city-owned ski area and increased visitor capacity at the Mendenhall Glacier recreation area, she said.

Renée Limoge Reeve, vice president of government and community relations for the trade group Cruise Lines International Association Alaska, said the agreements signed with the city were the first of their kind in Alaska.

The best strategy is “ongoing, direct dialogue with local communities” and working together in a way that also provides a predictable source of income for local businesses, she said.

Protect Juneau’s Future, led by local business leaders, said the success of the ballot measure would mean a loss of sales tax revenue and millions of dollars in direct spending by cruise passengers. The group was confident voters would reject the measure, its steering committee said in a statement.

Karla Hart, a sponsor of the initiative and frequent critic of the cruise industry, said the threat of litigation has kept communities from taking steps to limit cruise numbers in the past. She was heartened by legal wins this year in the ongoing fight over the measure passed in Bar Harbor, a popular destination near Maine’s Acadia National Park.

She believes the Juneau initiative will pass.

“Every single person who is going to vote has a lived experience and knowledge of how the cruise industry impacts their lives,” she said.



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