EU Aluminum Wheel Tax on Morocco Reveals Trade War Brewing with China
On March 14, the European Commission published implementation regulation No. 500/2025, establishing definitive compensatory duties on Moroccan exports of aluminum wheels. The regulation imposes duties of 31.45% for Dika Morocco Africa and 5.60% for Hands8.
The Moroccan Ministry of Industry and Commerce immediately responded. It stated that these duties were applied following an investigation process initiated on February 16, 2024, after receiving a complaint from the European Wheel Manufacturers Association (EUWA). The association claimed that Moroccan aluminum wheel exports benefited from subsidies harmful to the European industry.
'The partnership with the European Union is comprehensive and cannot be subject to a selective logic,' said Mustapha Baitas, government spokesperson, during a press conference following a government council meeting. He insisted that the government 'categorically rejects the surcharge decided by the European Commission.'
According to EU findings, Moroccan imports increased dramatically between 2020 and 2023, growing from 2% to 9% market share, with prices reportedly 16% lower than those of European producers. The European Commission argues this rapid progression, combined with what they term 'unjustified subsidies,' causes economic harm to their industry.
These compensatory duties come on top of anti-dumping duties already in effect since January 12, 2023, which range between 9% and 17.5%, potentially bringing total tariffs to over 40% for some Moroccan manufacturers.
The Moroccan government has announced it will not stand idle. The Ministry of Industry and Commerce stated it 'will spare no effort to defend the interests of companies and investors who have trusted the kingdom as a competitive base for production and export.'
In a clear sign of the consequences, the ministry revealed that 'the construction of Dika Morocco Africa's fourth factory, which was planned for Kenitra, has been canceled in favor of an ongoing investment to set up a factory in Portugal' due to these measures.
A report published by Chatham House in December predicted this scenario as a warning: 'Morocco may emerge as a focus in a forthcoming trade war.' The think tank went on to add that, 'under Trump, the US and the European Commission may roll out new measures targeting Chinese EV investments and joint ventures in third-party countries, including Morocco.'
This means 'Morocco could now play that same role for Europe' that Mexico plays for Chinese companies trying to access the US market, the report noted. Such a development would make the North African country 'an ideal pick for offshoring China's EV industry' due to its free-trade agreements with the US and EU, geographical proximity to European markets, and advanced automotive infrastructure. 'This is not targeted against Morocco, but against China wherever it goes'
Badr Zaher Al Azrak, economic analyst and researcher in business and trade, told Morocco World News (MWN) that Chinese investments in Morocco's automotive sector have been growing significantly, which has begun to worry European neighbors.
'Morocco has numerous free trade agreements with many countries: Turkey, Egypt, Jordan, the United States, plus many Arab and African free trade agreements. This bothers Europeans, especially since there's an open war in the automotive manufacturing sector between Europeans, Chinese, and Americans,' Al Azrak explained.
'I don't believe this decision is directed against Morocco, but rather against China wherever it operates. Chinese goods, particularly in car manufacturing, are unwelcome to Europeans,' he stressed. 'If China is going to use Morocco as a platform directed toward Europe, this may raise concerns and call for protective customs decisions from the European side to protect what they consider a threat to the automotive sector.'
Al Azrak pointed out that Morocco now finds itself a party in this conflict: 'The Kingdom of Morocco will seek to clarify to European partners that Morocco is an open platform. Just as it's open to European industry, it's also open to Asian industry.'
'This might slightly change the situation because the battle doesn't concern Morocco as much as it is an international battle between the European Union, the United States, and China,' he added. 'If sanctions against products manufactured in Morocco or other countries with Chinese investments are escalated, this may push China to look for other places to localize its investments, which would be a loss for the Moroccan economy.' 'EU measures translate the growing power of Moroccan industry'
Speaking to MWN, Abdennabi Aboulaarab, an economic expert, clarified that these EU protective measures against a key sector of Moroccan exports 'translate the volume that Moroccan exports in the automotive sector to the European Union have come to represent.'
'The European Commission's trade investigation revealed that tires made in Morocco are less costly and lower priced compared to European products, and that these Moroccan-made tires' market share jumped from 2% to over 9% in a short period,' Aboulaarab said. 'This indicates that Moroccan products are achieving steady growth that will enable them to capture larger market shares in the coming years. That's why the European Commission moved against these products.'
'This undoubtedly translates to the strength of Moroccan industry, the strength of this sector that has succeeded in opening up to international players the size of Chinese companies, which naturally pose a challenge to companies of European or American origin,' he added.
Aboulaarab detailed that Morocco still has significant room for maneuver: 'Morocco is a reliable economic partner with a trade deficit with the European Union, which gives it a red card against any customs, protectionist, or trade measures the EU might take against Morocco.'
'Morocco should not be deterred from further coordination in these industrial sectors because this coordination doesn't just involve European companies, but also aims to attract European and American companies,' he argued. 'The solution in this context that Morocco should strongly and effectively adopt is greater integration with various major markets worldwide, and pushing for more industrial and economic partnerships.'
'Based on this, it will be difficult for these industrial powers to take protectionist measures against Morocco,' Aboulaarab concluded. 'So we must remain optimistic and cautious at the same time, while working to take more actions and policies that, as I said, move toward deepening the kingdom's economic integration in its international environment.'
Read also: Donald Trump's Second Term: Accelerating History and Birth a New World Order Tags: European Commissionglobal trade warMoroccan automotive sector
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