EU Tariffs on Chinese Electric Vehicles Receive Cool Response from German Auto Industry

The European Commission’s recent decision to impose provisional tariffs ranging from 17.4% to 38.1% on electric vehicles (EVs) imported from China has sparked significant concern within the German automotive industry. VDA President Hildegard Müller has articulated the industry’s apprehensions, emphasising the potential for escalating trade conflicts and the broader implications for global cooperation and competition.

Context and Background

On June 12, 2024, the European Commission announced the temporary imposition of high additional tariffs on Chinese-made electric cars, set to commence in July. This move comes after an extensive anti-subsidy investigation, which identified significant state support for Chinese EV manufacturers deemed to distort market competition.

VDA Response

Hildegard Müller, representing the German Automotive Industry Association (VDA), criticised the EU’s decision as a step away from global cooperation. She highlighted that such protectionist measures could exacerbate trade tensions rather than strengthen the European automotive sector. According to Müller, the potential adverse effects of these tariffs might surpass any intended benefits.

Müller underscored the industry’s preference for free and fair trade, warning that both tariffs and unjustified subsidies pose risks to market stability. She noted that the recently announced measures might lead to broader trade conflicts, ultimately harming all parties involved.

Müller called for a constructive dialogue between the EU and China to address the challenges posed by subsidies and market distortions. She urged China to engage with Europe and present proposals to mitigate competitive imbalances, thereby preventing the escalation of trade disputes. She welcomed the EU’s offer for talks, stressing the need for partnership-based solutions.

The VDA President emphasised that global cooperation, particularly with China, is crucial for addressing significant issues such as climate change and the transition to electromobility. She warned that a trade conflict could jeopardise these efforts, undermining progress in crucial areas like digitalisation and sustainable transport.

Müller called for a shift in focus towards enhancing Europe’s attractiveness as an industrial hub. She argued that competitiveness and innovation are key to maintaining a leading position in the global market. Müller advocated for an active industrial strategy that includes robust trade policies, innovation promotion, and market expansion to secure growth and prosperity.