Trade Wars Could Hurt Europe Car Sales in China


The growing trade war between China and the European Union, which currently includes complaints about solar hardware and wine, may get much more bruising. Perhaps the best example of how much damage can be done to trade is what happened to Japanese auto company sales in China due to a nation-to-nation battle over the ownership of several very small islands last year. Japanese car sales in China plunged, undermining sales in the People's Republic for Toyota Motor Corp. (NYSE: TM), Honda Motor Co. Ltd. (NYSE: HMC) and Nissan. That problem could be mirrored due to trade tensions that could harm sales of the EU's biggest car firm.

Reuters reports on European carmakers' fears:

The European auto industry fears China could impose retaliatory trade duties on luxury cars imported from the European Union, should the EU Commission not back down over unfair trade practices in China.

"If there is not an improvement in the political climate, if it becomes a real trade war (…) if that is going to be the position and the strategy of the EU, then I think the Chinese will retaliate for sure," said a spokesperson for the European auto industry association ACEA on Friday.

According to the ACEA, an unknown person or persons filed an anti-dumping complaint with China's Ministry of Commerce that focuses on cars with engine displacements of 2 liters and more built in the EU and exported to the People's Republic.

Filed under: 24/7 Wall St. Wire, Autos, China