EU tariffs on Chinese EVs might possibly ease up

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.

THE CLOSING BELL: TADAWUL-

The TASI rose 2.0% yesterday on turnover of SAR 5.2 bn. The index is down 2.0% YTD.

In the green: Rasan (+10.6%), Acwa Power(+10.0%) and Cenomi Retail (+6.1%).

In the red: Batic (-5.8%), Atheeb Telecom (-4.4%) and Smasco (-4.4%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.3% yesterday on turnover of SAR 22.9 mn. The index is up 9.4% YTD.

In the green: Future Care (+22.9%), Burgerizzr (+10.7%) and Knowledge Tower (+9.5%).

In the red: Naseej Tech (-7.8%), Tam Development (-6.6%) and Fad (-5.9%)

CORPORATE ACTIONS-

#1- Tadawul-listed Saudi Industrial Development (Sidc) has submitted its application file to reduce its capital by 66.3% to SAR 135 mn to the Capital Market Authority, it said in a disclosure to Tadawul. It plans to bring its capital down from SAR 400 mn before hiking it via a rights issue as per its board’s earlier recommendation last month. Sidc has tapped Alinma Investment as financial adviser for the move which comes under its restructuring plan to help “offset accumulated losses.” The capital reduction is still subject to regulatory approvals and the approval of Sidc’s extraordinary general assembly.

#2- Shareholders of Tadawul-listed healthcare giant Saudi German Health have approved the board’s recommendation to not distribute a dividend for FY 2023, according to a regulatory filing (pdf).

#3- Tadawul-listed Al Babtain Power and Telecommunication Co. will distribute dividends of SAR 64 mn at SAR 1 per share for FY 2023 starting Wednesday, 26 June, it said in a disclosure to Tadawul.

#4- Shareholders of Nomu-listed Al Rashid Industrial have approved the board’s recommendation of a dividend of SAR 8 mn at SAR 1 per share for FY 2023, according to a disclosure to Tadawul. Eligible shareholders will be able to cash in starting Thursday, 11 July.

#5- Shareholders of Nomu-listed Almuneef Company for Trade, Industry, Agriculture and Contracting have approved the board’s recommendation to distribute SAR 7.6 mn in dividends at SAR 2 per share for FY 2023, according to a disclosure to Tadawul. The distribution date was set for Wednesday, 26 June.