Electric car, Japan electrifies the US and EU with an anti-China alliance?
Tokyo proposes to Brussels and Washington to join forces on plug-in mobility and semiconductors to stem Beijing's advance, but Berlin has a lot of business with China and Biden does not give up his anger. Is the alliance that Japan is asking for possible?
Putting protectionism and sovereignism aside in an attempt to join forces to recover the ground lost towards Beijing. This is the unexpected proposal delivered by the Japanese government to Western chancelleries. On paper, a convenient proposal to say the least, win-win for all parties involved, but there are numerous obstacles on the road that leads to the alliance desired by Japan.
WHAT WOULD BE THE ALLIANCE BETWEEN EU, USA AND JAPAN
In a very pragmatic speech, the Minister of Economy, Trade and Industry, Yasutoshi Nishimura , listed all the reasons why Japan, Europe and the USA risk losing the battle on electric cars. For this reason he invited Washington and Brussels to team up on plug mobility, semiconductors and other critical sectors.
CAN THE UNION OF THREE WEAKNESSES BE A STRENGTH?
Nishimura was naturally not very explicit, but the problems that concern the three economic and commercial powers are the following.
Europe, as we know, has a fragmented and therefore weakened industry, which has not managed to find a common position to deal with a legislator's position defined by many as ideological. Brussels demands that we rush towards the electric car, but everything is missing: infrastructure, gigafactories, investments and above all a supply chain of raw materials, those critical metals that today come from outside and are paid for at a high price. If the supply chain is not shortened, it will be exposed to market and, above all, geopolitical turbulence, as demonstrated by the price increases following Russia's invasion of Ukraine.
The USA, on the other hand, decided to play alone, tearing up the WTO agreements and imposing on the world its own rules included in the package for the reduction of Inflation ( Inflation Reduction Act ), which hidden between the folds rules with a strong protectionist flavour.
Japan, which has dominated the car market for much of the last period (the best-selling brand in the world is Toyota ), has the opposite problem to Europe: a political class at the mercy of the whims of the car world. A very powerful lobby. And since the Japanese automotive supply chain is strongly hostile to electric (having invested in hydrogen), the archipelago has so far not done much to prepare for the challenge of the immediate future.
IS THE ALLIANCE THAT JAPAN WANTS ANTI CHINESE?
Nishimura, interviewed by the economic newspaper Nikkei , underlined the need to establish common and shared standards with the United States and Europe on policies to support electric vehicles or microprocessors and to collaborate to promote a fair competitive environment. “We want to work with like-minded countries to establish supply chains and policies without falling into protectionism,” the Japanese Minister of Economy, Trade and Industry explained to the press.
Naturally, without ever naming it – and apparently with the sole aim of avoiding protectionist measures along the lines of US wrath – Nishimura intends to form an anti-Beijing alliance, in a period in which Japanese companies are quietly withdrawing from the vast Chinese market, which has become hostile. .
Not least Mitsubishi, which announced that it has decided, in light of the "current and rapid changes" in the operating context in China and the market difficulties, to interrupt local production and to sell 100% of the joint venture with Guangzhou Automobile Group to Chinese partner,
The alliance that Japan is asking for would also like the establishment of a three-way working group to "synchronize incentive policies" to give each other a hand on the issues of the supply of critical materials for the energy transition, investments in industrial reconversion , environmental standards and more.
WHAT WILL THE US AND EU RESPONSE?
As anticipated, on paper it is a win-win measure, but according to observers at the moment there is very little chance that it will pass. The United States has taken refuge behind the IRA which, despite the promises made by the White House to trading partners around the world, will not be dismantled anytime soon.
The EU, for its part, has to deal with Germany, which has strong economic interests in every field, but above all in the automotive sector, precisely in China. And he certainly doesn't want to upset her. This although the hostility found in the Asian country by Japan is also well known to German companies if we consider that the country's main group, Volkswagen, despite the rivers of money flowing into the East, has fallen from 15 to 10% in 10 years. of market share . The Chinese marches are advancing, not only in China as they are aiming at the West. What will the US and EU do?
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/auto-elettrica-il-giappone-elettrizza-usa-e-ue-con-unalleanza-anti-cina/ on Sun, 29 Oct 2023 06:46:43 +0000.