China asks its manufacturers to stop expansion in Europe in the midst of a tariff war

China is pressuring its car makers to halt their expansion in the European Union in the midst of a tariff crisis with Brussels over electric vehicles.

In particular, Beijing is asking its auto companies to paralyze their active search for production centers in the European region and the signing of new agreements with local companies, while waiting to see how negotiations with European Commission from Ursula von der Leyen.

In fact, Dongfeng was planning, which was confirmed by sources in the sector. Europe Pressannounce in early October the construction of a car plant in the city. Italydecided to paralyze all its operations in response to warnings from its government.

Chinese directive put forward Bloombergis not mandatory but comes at a time when tensions between Brussels and Beijing over the auto industry have reached a fever pitch.

Tariff war between China and Europe

However, beyond tariffs, Beijing will be concerned about possible overcapacity due to slowdown in electric vehicle sales from battery in Europe and low demand for Chinese cars in the market.

For its part, the Italian government Georgia Meloni believes there is growing concern that European manufacturers such as Volkswagen or Stellantis falling further and further behind competitors China and USAwhere local companies have benefited from avalanche government subsidies that financed the transformation of their industries.

“Europe needs a pragmatic vision, the ideological vision has failed. We must admit this,” commented the Italian Minister of Industry Adolfo Urso.

Manufacturers’ reaction

Outside Dongfeng, Chongqing Changan Automobile, the state-owned car manufacturer canceled an event this week to introduce its brand in Europe.

In this context cherry postponed until October 2025 its intention to begin production of electric vehicles at the plant EbroFabrika from Barcelona We are waiting to see how negotiations on tariffs will develop.

However, BID is moving forward with its plans to build a plant in Hungary with which you can avoid utility tariffs. At the same time, consider growing another plant with investment of more than 900 million dollars in Europe in Turkey.

Meanwhile, the electric vehicle market is slowing. This affected Chinese brands led by Nio And MG whose sales of electric vehicles in the region have nearly halved in the past month, the lowest level in a year and a half.