EU countries gave a definitive green light on Friday to hefty additional tariffs on electric cars made in China, despite strong German opposition and fears it will trigger a trade war with Beijing.

The European Commission—which provisionally approved the step in June after an inquiry found that Beijing’s state aid to auto manufacturers was unfair—now has free rein to impose steep tariffs for five years from end October.

China has slammed the “protectionist” tariffs and promised retaliation, but talks on addressing the subsidy dispute will continue between the two sides despite Friday’s vote.

Ten member states including France, Italy and Poland supported imposing the tariffs of up to 35.3 percent, coming on top of existing duties of 10 percent, several European diplomats told AFP.

Only five including Germany and Hungary voted against while 12 abstained including Sweden and Spain. Madrid initially supported tariffs before reversing course to call on Brussels to “reconsider” its decision.

Although the tariffs did not win support from a majority of states, the opposition was not enough to block them—which would have required at least 15 states representing 65 percent of the bloc’s population.

That leaves the choice on moving ahead in the hands of the European Commission—in charge of trade policy for the bloc—which said it had “obtained the necessary support for the adoption of tariffs”.

After the vote, China’s commerce ministry urged EU states to “return to the right track” by resolving trade frictions through dialogue.

“China firmly opposes the EU’s unfair, non-compliant and unreasonable protectionist practices in this case,” it said in a statement shared by state broadcaster CCTV.

‘Fatal signal’

The EU duties have pitted France and Germany against each other, with Paris arguing they are necessary to level the playing field for EU carmakers against Chinese counterparts.

Germany, renowned for its strong auto industry and its key manufacturers including BMW, Volkswagen and Mercedes heavily invested in China, urged the commission not to go ahead.

The vote’s results demonstrate how the EU’s biggest trade investigation in years has ruffled feathers, with the bloc’s biggest economy vehemently against the duties.

“The EU Commission should not trigger a trade war despite the vote in favor” of the tariffs, German Finance Minister Christian Lindner said. “We need a negotiated solution.”

Berlin has strong arguments on its side: Beijing has threatened to hit back hard and has already opened probes into European brandy, dairy and pork products imported into China.

“We will face all types of retaliation from China, that’s for sure,” one diplomat said.

China tried in vain to stop the duties coming into force through dialogue, but talks have so far failed to produce an agreement that satisfies the EU.

Any duties could be lifted later if China addresses the EU’s concerns.

Carmakers divided

French and German automakers are likewise divided over the duties.

German auto giant Volkswagen said they “are the wrong approach” while BMW said the vote was “a fatal signal for the European automotive industry”.

Both manufacturers urged more talks to prevent a trade conflict.

Meanwhile, US-French-Italian auto group Stellantis said it “takes note” of the vote, repeating its commitment to “free and fair competition”, echoing similar cautious comments made by the umbrella group, the European Automobile Manufacturers Association.

The extra duties also apply, at various rates, to vehicles made in China by foreign groups such as Tesla—which faces a tariff of 7.8 percent.

Chinese car giant Geely—one of the country’s largest sellers of EVs—said Friday’s decision was “not constructive and may hinder EU-China economic and trade relations, ultimately harming European companies and consumer interests”.

EU’s tightrope

Brussels says it aims to protect European carmakers in a critical industry that provides jobs to around 14 million people across the European Union but does not benefit from massive state subsidies like in China.

Canada and the United States have in recent months imposed much higher tariffs of 100 percent on Chinese electric car imports.

Trade tensions between China and the EU are not limited to electric cars, with Brussels also investigating Chinese subsidies for solar panels and wind turbines.

The bloc faces a difficult task as it tries to foster its clean tech industry and invest in the green transition without sparking a painful trade war with China.

© 2024 AFP

An international and interdisciplinary group of researchers has compiled a proposal for a new paradigm for economic performance and sustainability, promoting cooperation and ethical behavior as key drivers of economic success.

A team of researchers led by Associate Professor Jan Pfister from the University of Turku has introduced a forward-thinking approach to performance management, offering a vision for how businesses and organizations can achieve both economic success and sustainability.

In their publication in Qualitative Research in Accounting & Management, the researchers introduce the “prosocial market economy” as a model designed to embed cooperation, ethical behavior, and sustainability into organizational practices.

This research reconsiders the focus on self-interest and short-term gains that dominate traditional economic frameworks. Instead, it argues that organizations fostering prosocial behaviors—those that prioritize collaboration and collective well-being—are more likely to succeed over time. The proposed prosocial market economy highlights ethical responsibility as a key driver of both superior performance and long-term sustainability.

One of the key insights of the research is a new framework for success; the researchers explain why and how organizations emphasizing cooperation and ethical behavior outperform those driven solely by self-interest.

Drawing on evolutionary theory and insights from Nobel Prize-winning economist Elinor Ostrom, the study suggests that integrating the core design principles of prosocial groups into performance measurement and management practice fosters economic success. The study also highlights the role of sustainability: the prosocial market economy envisions businesses that can achieve economic success while contributing positively to environmental sustainability and social well-being.

“In the context of global challenges such as climate change, inequality, and resource depletion, this new model offers an alternative to traditional economic paradigms that prioritize short-term profits. The prosocial market economy provides a framework where business success and ethical responsibility coexist, helping companies address today’s complex demands while ensuring long-term viability and positive social impact,” explains Pfister.

This interdisciplinary research brought together experts from several institutions in Finland, the United Kingdom, U.S. and United Arab Emirates, and various fields, including accounting, management, and evolutionary biology.

The collaboration underscores the importance of integrating behavioral science and management studies to foster a more sustainable and cooperative economic system.

From theory to practice

The prosocial market economy offers practical tools for organizations across industries, both in the private and public sectors, providing business leaders with principles to design prosocial teams and foster collective success.

According to Pfister, “Our research clarifies why and how prosocial groups—those that prioritize shared success over individual gain—outperform groups driven purely by self-interest. This has profound implications for how we measure and manage performance, and how we cultivate organizational behavior that protects and nurtures a sustainable future.”

With increasing pressure from consumers, policymakers, and investors to embrace sustainable practices, this research moves beyond the conventional Environmental, Social, and Governance (ESG) debate, which often relies on external measurements.

The prosocial market economy focuses on transforming organizational cultures from within, embedding sustainability and cooperation into core values. This inside-out approach helps businesses foster genuine, lasting sustainability, avoiding greenwashing and the hypocrisy of superficial ESG compliance.

The prosocial market economy offers a pathway for organizations to be both economically successful and environmentally and socially responsible.

More than two dozen international civil society organizations will call on major tech firms to bolster their AI policies to combat “sexist and misogynistic” disinformation plaguing social media platforms, according to the draft of an open letter seen by AFP on Thursday.

The letter to the chief executives of six giants—Meta, X, YouTube, TikTok, Snapchat, and Reddit—follows an online boom in non-consensual deepfake porn as well as harassment and scams enabled by cheap, widely available artificial intelligence tools.

“It’s evident that these harms are not felt equally,” said the letter, signed by 27 digital and human rights organizations including UltraViolet, GLAAD, the National Organization for Women, and MyOwn Image.

“Specifically, women, trans people, and nonbinary people are uniquely at risk of experiencing adverse impacts of AI-based content on social media.”

The letter, which the groups said will be made public on Friday, made a dozen recommendations to strengthen AI policies.

Those include clearly defining the consequences for posting non-consensual explicit material—which should include suspension of repeat offenders—implementing a third-party tool to detect AI-generated visuals, and clear labeling of such content.

The groups also demanded a coherent procedure for users to flag and report harmful content and that platforms carry out comprehensive annual audits of its AI policies.

Misogynistic, sexist attacks

The letter comes barely a month before what is widely billed as America’s first AI election on November 5. The tight race to the White House has seen a firehose of disinformation.

A particular target of gendered disinformation is Democratic Party nominee Kamala Harris, which has included a flood of misogynistic and sexist narratives attacking the first Black, South Asian and woman vice president in US history.

“These harms silence us online, violate our right to control our own image, and distort our elections,” said Jenna Sherman, the campaign director at UltraViolet.

“But worse, they normalize and even algorithmically codify sexual exploitation and reinforce harmful stereotypes about gender, sexuality, and consent.”

The proliferation of non-consensual deepfakes is outpacing efforts to regulate the technology globally, experts say, with several photo apps digitally undressing women and manipulated images fueling “sextortion” rackets.

While celebrities such as singer Taylor Swift and actress Emma Watson have been victims of deepfake porn, experts say women not in the public eye are equally vulnerable.

“AI technologies have further facilitated the creation and spread of gender-based harassment and abuse online,” said Ellen Jacobs, senior US digital policy manager at the Institute for Strategic Dialogue, which was among the organizations that signed the letter.

“We need effective policies that specifically address the heightened risks to women, girls, and LGBTQ+ people.”

The platforms did not immediately respond to a request for comment ahead of the release of the letter.

“The world’s largest platforms have shown they are not equipped to handle the rise of AI-facilitated hate, harassment, and disinformation campaigns, including deepfakes and bots that can spew hate-based imagery at massive scale,” said Leanna Garfield, social media safety program manager at GLAAD.

The platforms “need to take concrete action now, so that everyone can feel safe online.”

© 2024 AFP

C-suites are filled with strong personalities that can help drive new and exciting offerings. But when it comes to breakthrough technological innovations, a new study published in Strategic Management Journal found it’s essential that CEO overconfidence is balanced by a board of directors with expertise and power.

To examine their hypotheses, the team used a sample of U.S. publicly listed firms within the S&P 1500 that operate in high-tech industries, as previous research has shown that breakthrough innovations—defined as something that significantly alters or creates markets—are especially important in these environments.

They focused on two board qualities: expertise and power. The importance of expertise is well studied in other areas such as acquisitions: Firms with boards that have experience in acquiring businesses make better decisions in this avenue. Having experience with breakthrough innovations is crucial, as it can help—for example—to ally investment concerns that board members might otherwise have.

Board power was measured in relation to how much independent sway the board has in relation to the CEO. This would be a board where the CEO is not the chair, or where board members have more tenure with the company than the CEO, or when members have a significant stake in the company. These board members are more likely to put pressure on the CEO to prove an idea is worth pursuing, and to ensure all necessary information is provided.

“The powerful board is necessary to make these adjustments or to rectify some misperceptions that may come with this overconfidence,” Kraft says.

“It’s not about stopping these CEOs from being innovative—it’s good that they want to go for innovation—but rather to guide them to really make better decisions in terms of the right projects, making adjustments in terms of resource allocation decisions, and also take into account new information that comes the further you get with a project.”

The researchers found that the relationship between CEO overconfidence and breakthrough innovations is strongest in firms with high board expertise and power, leading to a 113% increase in breakthrough innovations relative to the sample mean. Both expertise and power were found to be crucial, as they also discovered that powerful boards that lack expertise may be detrimental to harnessing CEO overconfidence.

“If you want to push breakthrough innovation in your firm, then you should be careful of the people you hire for your board,” Kraft says. “You should be surrounded by people that understand the topic, because they can give you good advice. But the company must also balance the power between the CEO and the board.”