The poisoned gift from Brussels to MG

On July 4, vehicles produced in China will see their customs duties increased. MG was facing a record tax of 38.1%.

The European Commission, after an investigation lasting more than 9 months, determined that MG and its parent company SAIC did not meet European requirements regarding public subsidies. Given that SAIC is a state-owned enterprise, it’s no surprise that it enjoys generous benefits. However, it seems that this went well beyond what is acceptable, as MG received the heaviest penalty with an additional tax of up to 38.1%. In comparison, BYD is subject to 17.4% and has refrained from responding…

According to our colleagues at Bloomberg, Brussels has ultimately decided, in its great mercy, to make a gesture of appeasement and reduce this tax to… 37.6%! It’s uncertain whether this will be enough to calm Beijing’s anger, and one might even think that this decision is only meant to stoke it further. For instance, the Geely Group sees its penalty drop from 20% to 19.9%. A barely concealed way of saying “We can make efforts, but only if you show good will!”

These provisional duties will be introduced on July 4 to take effect no earlier than November. Negotiations are just beginning, and China has already threatened to retaliate beyond the automotive sector, while the findings of an investigation into European imports of spirits are expected in the coming months. Beijing has warned that it could target agricultural products, aviation, and premium cars.