Why European Airbus is grumbling about EU duties on China
At the announcement of new EU duties against Chinese electric cars, the aeronautical giant Airbus highlighted the impact of growing trade tensions. The move comes in the aftermath of rumors of a major sale of A330neo aircraft to China
European ski giant Airbus complains against EU duties on Chinese electric vehicles.
Yesterday the European Commission announced new duties on the import of Chinese electric cars into Europe to protect European production. Chinese Foreign Ministry spokesperson Lin Jian had already said that Brussels' move would damage economic cooperation between China and the EU.
Without forgetting that at the end of May Politico revealed that Beijing has warned the European Union that it would hit the aviation and agriculture sectors unless Brussels withdraws from an imminent trade war. The most severe measures for aviation would likely affect Airbus, the European aircraft maker that is the largest supplier to the Chinese market. On the other hand, Beijing has already threatened to hit Airbus in the past, saying that it would not buy its planes if Chinese airlines were subject to EU rules on carbon emissions trading.
Asked yesterday to comment on the European Commission's decision to impose additional tariffs of up to 38.1%, a spokesperson for the world's largest jet maker did not directly comment on the move, but said that trade tensions were a challenge for global companies, Reuters reports.
Just last week Bloomberg News reported that Airbus was discussing an order for 100 wide-body planes with China.
All the details.
THE EUROPEAN AIRCRAFT MANUFACTURER'S POSITION ON EU MOVES
“We see growing tensions on trade around the world and these are testing the resilience of global companies like Airbus,” a spokesperson for the European giant said in an emailed statement to Reuters .
“We sell to customers all over the world. Trade tariffs increase complexity and costs for our supply chain, Airbus and our customers,” the statement added.
WORKING ON A MAXI ORDER
As mentioned above, Airbus has recently entered into negotiations with China for a major potential aircraft order. Specifically, the European manufacturer is negotiating a sale of A330neo aircraft to China, with talks gaining steam since President Xi Jinping visited his French counterpart Emmanuel Macron last month.
China's largest airlines are considering purchasing more than 100 upgraded A330 models, according to people familiar with the matter. Terms are still being discussed and the timing is uncertain, according to Bloomberg 's sources.
COMMENTARY FROM EXPERTS AND ANALYSTS
Certainly the announcement of EU duties on Chinese vehicles risks having repercussions on the agreement for the Airbus order.
An industry source, speaking after the EU announcement, told Reuters that an imminent sale to China looked increasingly ambitious amid the trade dispute and political uncertainty in Europe.
Additionally, analysts note that wholesale aircraft orders from China's state purchasing agency tend to include a mix of new deals and repeat announcements, and that the timing of such announcements reflects the ebb and flow of business relationships. Aviation is among the sectors where Beijing has privately warned Brussels that the EU could be targeted if the bloc goes ahead with plans to impose tariffs on electric vehicles made in China. China put these threats on paper in a letter to EU trade chief Valdis Dombrovskis, according to some press reports.
THE AIMS OF THE EUROPEAN MANUFACTURER IN THE CHINESE MARKET
Finally, Airbus has long confirmed China's central place in its growth plan.
Although China's rapid economic growth in recent decades has slowed dramatically due to the pandemic, the domestic aviation market is recovering. And with average air traffic growth forecast at 5.3% per year over the next 20 years, China will continue to be one of the world's major markets. With Airbus' estimated requirement of nearly 8,500 new aircraft over the period, the country is expected to account for more than 20% of global demand.
China has historically roughly split its import needs between Airbus and its U.S. rival Boeing, but Chinese orders for Boeing planes have been scarce in recent years, a period that coincides with turbulence in China-U.S. relations. So the European aircraft manufacturer aims to take advantage of it, but Brussels' move risks representing an obstacle.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/perche-leuropea-airbus-brontola-sui-dazi-ue-alla-cina/ on Thu, 13 Jun 2024 10:09:06 +0000.