Autos Stocks Gain as China, EU Agree to Hold EV Tariff Talks

Why after deciding to put tariffs in place on Chinese E VS is the EU now agreeing to hold talks with China? Yeah, the EU really approached this differently, at least, you know, in their view. And I think in reality than say Washington did. Or even we, we've seen other countries, including Turkey or Brazil put in place higher tariff rates on electric vehicles really out of concern of, of the amount of, of volume coming out of China and flowing into these other markets. And I think there's a real effort and has been, you know, really since these were implemented to sort of, you know, a differentiate and, and to lay out the case for, hey, you know, we went out at this with a month long investigation to get to the bottom of just how much, you know, subsidization has been applied to this industry. And really came up with, you know, he sort of did the math essentially and are showing our work in terms of, you know, just how much of, of a tariff needs to be put in place company by company based on how much support they've had over the years. So that will be part of the message that EU officials will bring to their Chinese counterparts. What else are they going to be using in terms of this discussion, this debate, this negotiation to try and put pressure on, on China to try and push through some, some, some accessions? At least? I, I think, you know, I, I would assume that that there is going to be, you know, some sharing of some of the particulars around this investigation to kind of, you know, you know, make layout the case for, for why this, this, these tariffs have been put into place. There's also, I think, you know, going to be a desire on the part of, of folks on the, the Brussels side to, to really try and, and limit the, the extent of sort of return fire, if you will. So there's already been, you know, threats made of, of putting tariffs on imported vehicles with large engines. That's a big concern for the Germans in particular. Volkswagen and Mercedes and BMW are very worried about that. But also beyond the auto industry, I mean, you know, the the threats being put on, you know, everything from dairy to to wine to to French Brandy. So this has the potential to, you know, become something much more than just a trade fight over cars. There is, you know, a concern that this boils over into something much more and that there's more of a sort of back and forth tit for tat here along the lines of what we saw, you know, during the Trump administration between Washington and Beijing. Well, Craig, what is your assessment of the propensity of Chinese officials to do to go full force on this then in term in terms of the reality, in terms of actually putting in place restrictions to try and punish, essentially punish the EU over this? What, what have we been hearing from Beijing in terms of their potential response? Yeah, I, I think our executive editor, John Lew spoke to this earlier this morning Europe time about this idea that, you know, in China, there's going to be a desire to really sort of, you know, get, get some concessions here, show that they've been tough on Brussels and and, you know, extracted something for their companies. I think, you know, I, I do think there's also some consistency in terms of, you know, one of the things that does align Washington and Brussels is this concern about over capacity. And so while while China will sort of message, you know, to this idea of, you know, big companies like BYD and CATL are setting up shop in Europe and and you know, hiring workers in in Europe to to make electric vehicles and batteries. One of the big concerns that you hear from Brussels and Washington is about the extent of over capacity in China. So even if there is some on the March in, you know, investment outside of China, what is going to be done about the fact that there are so many companies and, and battery companies producing so many vehicles and batteries? And, and, you know, to what extent can the rest of the world even, you know, possibly compete when, you know, they're working with, with, with a work with workforces that are, are paid more and, and sort of undercut by the fact that China just has so much capacity and, and such an advantage in terms of, of price.