[extreme_torque]

Originally Posted by SmartCat

Meanwhile, VW top management seems to be drinking stupid cola. Shutdown plants in Germany but express concerns about EU tariffs on Chinese imports.

Given China is the single biggest market for VW in the world and they are dependent on Chinese tech for their future EV's, what do you think happens if China also slaps high duties on VW products sold in China?

[Bibendum90949]

Originally Posted by ZenMaster

This is a result of VW's over-reaction to the diesel gate scandal and virtue signaling by OEM managements across Europe to "Electrify their lineup" by 2030 which is also partially forced by the highly stringent upcoming Euro-7 regulations.

Here are the related threads/news.

https://www.team-bhp.com/news/merced...-ev-goals-half

https://www.team-bhp.com/forum/inter...-ev-sales.html (Mercedes-Benz goes back to ICE vehicles, amidst weakening EV sales)

https://www.carscoops.com/2024/09/to...box=1725716117

[SmartCat]

Originally Posted by extreme_torque

Given China is the single biggest market for VW in the world and they are dependent on Chinese tech for their future EV's, what do you think happens if China also slaps high duties on VW products sold in China?

This irrational fear has allowed China to bend and break the rules of international trade. Weak kneed or non-existent response has let China continue to cheat for decades. In a trade war, the bigger exporting country always loses (not just in terms of revenues, but in jobs). Because they have larger amount of merchandise to sell and hence have more workers employed.

China gives the impression of being a 'Madman', who has nothing to lose. But actually, the Chinese side too will apply game theory & carefully analyze the risks & rewards of a trade war, before taking action. Apparently, this was their response to EU tariffs:

https://www.team-bhp.com/forum/elect...ml#post5788206 (EU announces up to 38% duty for Chinese EVs)

Also, VW has a large marketshare in China, but most VW cars are locally made. So if China slaps heavy duties on VW imports, it will not affect VW that much. It is similar to Maruti/Suzuki story in India.

[extreme_torque]

Originally Posted by SmartCat

This fear allowed China to bend and break the rules of international trade. Weak kneed or non-existent response let China continue to cheat for decades. In a trade war, the bigger exporting country always loses (not just in terms of revenues, but in jobs). Because they have larger amount of merchandise to sell and hence have more workers employed.

Exactly which international rules have they broken? The current China EV success story is not coming from copying western brands but by beating EU at their own game. On the other hand the EU makers are so bad at building EV's that they literally cannot survive without China.

There is nothing coming from the EU that the world wants these days, relatively speaking, except silly regulation - their last bastion aka cars are now under huge threat from China. If the world moves exclusively towards EV's, it is only a matter of time, tariffs or not.

Originally Posted by SmartCat

China gives the impression of being a 'Madman', who has nothing to lose. But actually, the Chinese side too will apply game theory & carefully analyze the risks & rewards of a trade war, before taking action.

I never said there would be a knee jerk reaction to EU tariffs. I am saying they can play the game if they wanted to. Apart from exports, on which the west is equally dependent on because they have forgotten how to manufacture stuff at scale of cheap, do not forget that China is also a massive consumer market - even bigger than US in most cases. And they continue to forge ahead.

Originally Posted by SmartCat

Also, VW has a large marketshare in China, but most VW cars are locally made. So if China slaps heavy duties on VW imports, it will not affect VW that much. It is similar to Maruti/Suzuki story in India.

VW is a joint venture in China so not all of the profits are leaving China. Second, VW is just one car maker from Germany. As it turns out, China is also the biggest market in the world for Audi, Mercedes, BMW and Porsche amongst others

[SmartCat]

Originally Posted by extreme_torque

Exactly which international rules have they broken?

When it comes to WTO rules on subsidies, China is a regular offender. WTO has very specific rules about what subsidies are allowed and what are not. It is a myth that Chinese EVs are cheap because they have discovered a revolutionary low cost manufacturing system. It is cheap because of Chinese subsidies.

I am saying they can play the game if they wanted to.

If an Olympic athlete cheats in a game, the solution is not let other athletes cheat too. So it does not happen even in a game, let alone international trade.

So WTO has specific rules & regulations about how to handle trade cheaters. It is called countervailing duties.

Countervailing duties (CVDs), also known as anti-subsidy duties, are trade import duties imposed under World Trade Organization (WTO). They are applied following an investigation that determines a foreign country's subsidies on exports have harmed domestic producers in the importing country. These duties aim to counterbalance the adverse impacts of such subsidies.

According to World Trade Organization rules, a country can launch its own investigation and decide to charge extra duties, provided such additional duties are in accordance with the GATT Article VI and the GATT Agreement on Subsidies and Countervailing Measures.

These 40% to 100% duties on Chinese EVs are placed after extensive investigation & research into Chinese subsidy policies. The percentage too is not a random number taken from a hat. If China is aggreived because of these duties, they can always drag US/EU to WTO. But they won't because China knows they will lose, since the legal case against importing Chinese EVs is so strong.

[prakash_ajp]

Originally Posted by SmartCat

When it comes to WTO rules on subsidies, China is a regular offender. WTO has very specific rules about what subsidies are allowed and what are not. It is a myth that Chinese EVs are cheap because they have discovered a revolutionary low cost manufacturing system. It is cheap because of Chinese subsidies.

By now, everyone must have realized that WTO and every other org that start with W or U are nothing but other names for USA. So, I don't their opinion or assessment at all. If it comes to that, India will also be labelled similarly.

Originally Posted by SmartCat

If an Olympic athlete cheats in a game, the solution is not let other athletes cheat too. So it does not happen even in a game, let alone international trade.

If the one who's making the rules is the one that cheats more than anyone, nothing wrong in with saying, 'let everyone follow rules or nobody follows".

[SmartCat]

Originally Posted by prakash_ajp

By now, everyone must have realized that WTO and every other org that start with W or U are nothing but other names for USA. So, I don't their opinion or assessment at all. If it comes to that, India will also be labelled similarly.

US/EU have been extremely fair to India when it comes to trade. So much so that India has a trade surplus with both US and EU. We have trade deficit with China, South Korea, ASEAN and Japan, with China having a lion's share.

So if duties are indeed slapped on certain Indian goods by the West & it is not fair, we can drag them to WTO court. Saying that WTO is in the pocket of the West is without any merit. India regularly wins or settles cases against US/EU. Eg:

India wins solar case against US at WTO
https://www.livemint.com/news/india/...634893762.html

India-US successfully resolve all seven pending WTO disputes bilaterally
https://www.business-standard.com/wo...2300202_1.html

See? We don't go into trade wars if one party slaps duties on the other. We go to WTO court. That's the civil way of handling a trade dispute. Only a rogue or a bully like China threatens a trade war. That's why I find support for China and vilification of the West on this forum perplexing.

[prakash_ajp]

Originally Posted by SmartCat

US/EU have been extremely fair to India when it comes to trade. So much so that India has a trade surplus with both US and EU. We have trade deficit with China, South Korea, ASEAN and Japan, with China having a lion's share.

So if duties are indeed slapped on certain Indian goods by the West & it is not fair, we can drag them to WTO court. Saying that WTO is in the pocket of the West is without any merit. India regularly wins or settles cases against US/EU. Eg:

India wins solar case against US at WTO
https://www.livemint.com/news/india/...634893762.html

India-US successfully resolve all seven pending WTO disputes bilaterally
https://www.business-standard.com/wo...2300202_1.html

Thanks for the links, although it's not very clear if the US reciprocated after India agreeing to reduce the import duty. I am out of my depth here, but I am guessing that the US believes India can never trouble the US when it comes to trade. We just don't have the resources of prowess that the US fears. Imagine a company like IBM closing their operations in India as they did in Russia or China? That'll be mutual destruction.

Originally Posted by SmartCat

See? We don't go into trade wars if one party slaps duties on the other. We go to WTO court. That's the civil way of handling a trade dispute. Only a rogue or a bully like China threatens a trade war. That's why I find support for China and vilification of the West on this forum perplexing.

It's not the support for China, but it's the strong belief that the "greatest country on the planet" is incapable of good intentions. In fact, I am of the opinion that if the roles were reversed, China might do the exact same thing. I guess, we are learning the hard way that globalization has run its course.

[SmartCat]

Originally Posted by prakash_ajp

I guess, we are learning the hard way that globalization has run its course.

The so-called reversal/end of globalization is just a rhetorical statement. Steadily increasing World imports/exports trade data indicates otherwise.



One should not be equating importing everything from China with globalization. True globalization is supply chain & finished goods diversification across multiple countries.

[prakash_ajp]

Originally Posted by SmartCat

The so-called reversal/end of globalization is just a rhetorical statement. Steadily increasing World imports/exports trade data indicates otherwise.

Attachment 2652915

One should not be equating importing everything from China with globalization. True globalization is supply chain & finished goods diversification across multiple countries.

Smartcat, I don't dispute that at all. The fact that countries are using this as a weapon, means we (countries) are incapable of conducting trade in a fair manner. And hence I made that point, meaning to say, it's not being what it's supposed to be.

[SKC-auto]

VW is terminating several of its collective bargaining agreements. The core brand of the car company of the same name wants to renegotiate the pay of its workers, its managers and temporary workers, among other things.

The company informed IG Metall of the termination this afternoon. This means that the current collective bargaining agreements and the job security stipulated therein will expire at the end of this year. If the union and the carmaker do not agree on new job security, VW could terminate its employees for operational reasons from July 2025.

The company said it was forced to make the cuts due to the current economic challenges. "We must enable Volkswagen AG to reduce costs in Germany to a competitive level in order to invest in new technologies and new products from its own resources," said Group Board Member for Human Resources and Labor Director Gunnar Kilian. With a view to the competition and Germany as a business location, this is now crucial.

https://www.spiegel.de/wirtschaft/vo...7-49d1f75efbf4