We’ve been warning about what the impending flood of cheap cars from China will do to the U.S. auto market. It’s already happening in Europe.
Chinese Premier Xi Jinping visited France this week and met with French President Emmanuel Marcon. The two sides discussed a variety of timely topics, including China’s aid to Russia and a range of trade issues.that can not be displayed Much progress has been made.
An article published in the famous French newspaper Le Monde may give some insight into why.
During President Xi’s visit, Le Monde published a very timely article about how the flood of cars from China happened. threatening the European market. Le Monde correspondent Jean-Pierre Strubant visited the Belgian port of Antwerp-Bruges to find out how a glut of Chinese-made cars was flooding the market, and found that the port was completely overwhelmed. I realized that.
“‘Yes, we currently have cars that have been parked here for a year, in some cases a year and a half,'” an ICO employee admitted on condition of anonymity. “Some days the chaos really gets out of hand.” One of my colleagues said as he extinguished a cigarette with his foot. ”
It is expected that between 600,000 and 1 million Chinese-made vehicles will be unloaded at the port of Antwerp-Bruges in 2024. Both electric and internal combustion engine vehicles will be introduced, including brands such as Tesla, BMW and Polestar. Audi is also expected to join this market soon. All of these vehicles were manufactured in China.
Meanwhile, Le Monde reports that the nearby Karoo port is also experiencing a puncture. Calloo’s huge car park is set up to accommodate 130,000 vehicles, but “currently feels too small.”
“3.4 million vehicles passed through these two ports in 2022,” Strobobanz wrote. “Since then, the market has evolved further, the challenges have grown, and operators are doing their best to solve vehicle storage problems.”
What is happening in Belgium should not only be a wake-up call for all of Europe, but also serve as a warning to the United States.
China in a nutshell There is an automatic overcapacity problem. The company is producing more cars than it needs, so it exports all surplus cars to Europe. And this is a problem because there is not enough demand for all these new Chinese cars in Europe, especially considering that Europe has a lot of its own car manufacturers.
Belgian ports aren’t the only ones in turmoil.European car market currently facing ‘dramatic changes’, Financial Times report:
“UBS analysts…expect that by 2030, one in five cars sold in Europe will be a Chinese brand, compared to just 3% last year, which has a negative impact on established nameplates. is affecting.
“Chinese battery and electric car makers are following a strategy that foreign executives say has harmed other overseas industries: overinvestment fueled by subsidies and local government support has created excess capacity; It will be released on the global market.”
European officials are very concerned about the increasing influx of Chinese-made cars, and the European Commission started an investigation China’s car subsidies are also being investigated, and the investigation is expected to lead to tariffs.
Now is probably a good time to shift the focus to what is happening in the US and why the situation in Europe should ring a big alarm here.
The only reason ports like Los Angeles, Houston, and Savannah aren’t overwhelmed with imports of cars, trucks, and SUVs from China is because the U.S. already imposed tariffs on Chinese-made cars. Therefore, Chinese automakers sent their vehicles elsewhere.Or to put it better, almost anywhere else.
But U.S. tariffs have not permanently solved the problem. They just kicked the can down the road, so to speak. The U.S. auto market is so lucrative that Chinese automakers are looking for loopholes to avoid tariffs. surely, The Chinese-made Volvo EX30 is scheduled to hit U.S. auto dealerships this summer.. Meanwhile, many Chinese automakers are using Mexico as a backdoor to enter the U.S. market. we warned you earlier this year This could lead to an “extinction-level event” for the U.S. auto industry.
We have submitted various policy proposals. About collision course reports The measures, including the imposition of additional tariffs and the enactment of Section 421 import surge protection, are aimed at addressing China’s uncontrollable overproduction of automobiles.Congressmen like Sen. Sherrod Brown (D-Ohio) called for a complete ban About Chinese vehicles.
This brings to mind President Xi’s visit to France.meanwhile Mr. Macron did his best to charm Mr. Xi., the two sides made no progress on immediate issues, including China’s overcapacity. That’s probably because it’s Mr. Xi. Officially denies that his country has an overcapacity problem at all.This provides insight into how the rest of the world needs to respond to it.
China intends to continue shipping cars, steel, solar panels, and all sorts of other goods overseas to Europe and the United States as much as possible. That’s the strategy. China is not going to suddenly change course after a two-day trip. Armed with this knowledge, it is up to policymakers to develop policies that ensure our nation’s industries, including automobiles, can withstand impending flooding.
