China wants to hash out EV tariffs with the EU: China has agreed to enter into negotiations with the EU over the bloc’s move to impose higher tariffs on imported Chinese EVs, the Financial Times reports, with German Vice-Chancellor Robert Habeck paying a visit to Beijing in a bid to “[soothe] tensions.”

REFRESHER- The EU passed a decision this month to push tariffs on imports of Chinese EVs to up to 48% on some vehicles. The move follows an anti subsidy investigation initiated by the supranational political union last year against Chinese EVs.

Are the tariffs already hitting trade volumes? German exports to China dropped 14% y-o-y last month, the Financial Times reports separately. Although tensions could be rising between Beijing and Berlin over the EV tariffs, analysts and economists suggest the export decline is likely attributable to other factors, including weaker auto sales in China or “a lagged impact of the Red Sea blockage.” It doesn’t look like this reading is the start of a new downtrend,” Oxford Economics economist Oliver Rakau said.

As one door opens, another door closes: The Canadian government is also mulling passing its own set of fresh tariffs on Chinese-made EVs, in a bid to match actions by the US and EU, Bloomberg reports, citing people familiar with the matter. The decision is still pending, with public consultations about the matter expected to kick off soon, the business information service cites officials as saying.

REMEMBER- The Biden administration also revealed plans last month to nearly quadruple tariffs on Chinese EVs to up to a final rate of 102.5%, as part of an election-year bid to ramp up domestic manufacturing in critical industries. The government accused the Chinese market of “cheating” on trade, and dumping underpriced goods into international markets.

Chinese EVs are priced notably more affordably than Western brands, with some selling for 20% cheaper in the EU, on the back of Chinese companies supplying a significant portion of global EV batteries, Al Jazeera reports. Chinese EVs dominated an 8.2% market share in the EU in 2023, with China’s BYD surpassing Tesla as the world's largest electric car company in 2023. Predictions place Chinese EVs as comprising an 11% market share in the EU in 2024 and possibly 20% by 2027.

MARKETS THIS MORNING-

Major Asian benchmarks are each down around 0.6% this morning as the trading week gets started, with only the Nikkei bucking the trend — it’s flat. Traders are looking forward to Australian and Japanese inflation data this week. US stock futures are down slightly overnight as traders prepare for the last week of the first half of 2024.

EGX30

27,062

+2.4% (YTD: +8.7%)

USD (CBE)

Buy 48.08

Sell 48.22

USD (CIB)

Buy 48.10

Sell 48.20

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

11,730

+2.0% (YTD: -2.0%)

ADX

9,013

+0.7% (YTD: -5.9%)

DFM

4,012

+0.6% (YTD: -1.2%)

S&P 500

5,465

-0.2% (YTD: +14.6%)

FTSE 100

8,238

-0.4% (YTD: +6.5%)

Euro Stoxx 50

4,907

-0.8% (YTD: +8.5%)

Brent crude

USD 85.24

-0.6%

Natural gas (Nymex)

USD 2.71

-1.3%

Gold

USD 2,331.20

-1.6%

BTC

USD 64,015.00

-0.4% (YTD: +51.4%)

THE CLOSING BELL-

The EGX30 rose 2.44% at yesterday’s close on turnover of EGP 2.9 bn (34.6% below the 90-day average). Local investors were net sellers. The index is up 8.7% YTD.

In the green: Alexandria Containers and Cargo Handling (+10.0%), Telecom Egypt (+8.1%), and EFG Holding (+6.3%).

In the red: Edita (-0.1%).

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