According to the institute, the Chinese company BYD plans to capitalize on the tariff-free export agreement between Turkey and the EU for industrial goods.
Analysts from the PIE Weekly drew attention to the activity of Chinese electric car manufacturers, who intend to introduce their products to the EU market using the tariff jumping method, circumventing the tariffs that the EC introduced in July 2024.
According to PIE, this approach is exemplified by the announcement from BYD regarding the construction of a factory in Szeged, Hungary. Another example is the agreement between the Chinese company Chery and the Spanish car manufacturer Ebro. The two intend to jointly produce electric vehicles at the facilities where Nissan cars were manufactured until 2021.
“The Chinese investor plans to leverage the customs union that has connected Turkey and the European Union since 1995 in two categories of goods—industrial products and agri-food processing. This means that investors present in Turkey have the opportunity to export their goods to European markets without tariffs,” PIE Weekly wrote.
The publication also notes that Turkey has recently enjoyed growing popularity among foreign investors, the 2023 EY Europe Attractiveness Survey in which Turkey was ranked 4th on the continent in terms of the number of greenfield projects (375), ahead of Poland, which was ranked 6th with 229 projects.
The Analysts from PIE say that the reason for this was Turkish president Erdogan’s return to “orthodox economic policy after the 2023 presidential election.”
“Previously, the enthusiasm for investing in Turkey was cooled by a highly unconventional policy of fighting the economic crisis and the accompanying macroeconomic instability,” they added.
Customs duties on Chinese cars
Back in July, the European Commission decided to impose temporary tariffs on three Chinese companies covered by the EC investigation: BYD (17.4%), Geely (20%), and SAIC (38.1%).
These tariffs aimed to strike a balance between subsidized Chinese enterprises and local European manufacturers.
But the EU tariffs are temporary, and the decision to introduce permanent tariffs has to be made by the majority member states. The vote on this issue may take place in October.
