The head of Stellantis Automotive Group said on Thursday that imposing 100% tariffs on Chinese cars like the United States just did is a “huge trap.”
Carlos Tavares said: “When you put a bubble around a market, whether it’s the U.S. market or European market, the first thing you do is create massive inflation within the bubble. “His group includes brands from France, Italy and the United States. state.
“When you create inflation, you undermine the purchasing power of the middle class and exacerbate the technology gap between those inside the bubble and those outside the bubble who are busy conquering the world,” he told French television.
On Tuesday, U.S. President Joe Biden announced a quadrupling of tariffs on Chinese electric vehicles to 100%.
On the same day, Stellantis agreed to form a joint venture with its Chinese partner Leapmotor to produce electric vehicles that will be exported to France, Italy, Belgium, the Netherlands, Germany and Spain starting in September.
The European Union launched an investigation into China’s electric vehicle subsidies in September 2023, accusing Beijing of distorting competition.
To circumvent any possible trade barriers, Leapmotor plans to build cars in Europe, following Chinese manufacturer BYD’s announcement of a new factory in Hungary and Chery’s plans to build cars in Spain.
By being produced in Europe, they will be eligible for a French government scheme to subsidize the sticker prices of electric cars, making them cheaper.
Asked whether the agreement was not tantamount to “letting the wolf into the sheepfold,” Tavares said sales of Leap cars in Europe would “bring profits to Stellantis, which would then be taxed in France and Europe.”
“We didn’t wait until there were Chinese manufacturers big enough to acquire Western manufacturers,” he argued.
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