It’s been some time since since we had a “Trade War Watch” on mounting trade tensions in the auto industry, and thank goodness for that. In this economic climate of cuts, currency swings and bankruptcies, what we need are things which will make the situation worse, right? In May I reported about how the EU put a 20.6 percent tariff on aluminium wheels from China. The EU did this in response to complaints from domestic manufacturers. Naturally, this left a sour taste in China’s mouth. Well, over 5 months later, you’d think that the EU would have calmed down and this nasty business would be swept under the carpet, right? Erm, not quite….
Bloomberg reports that the EU have not only turned the temporary tariff into a 5 year tariff but increased it from 20.6 percent to 22.3 percent. Chinese exporters like YHI Manufacturing (Shanghai) Co. and Zhejiang Wanfeng Auto Wheel Co. will get hit by this new tariff. But not only will they get stung, but also BMW and Renault will because they buy these wheels from Chinese suppliers. Thus, the price of their cars will rise. The tariff is expected to be imposed by November the 11th.