Germany Undecided on Whether to Support EU Tariffs on Chinese EVs

Germany hasn’t decided yet if it would support the EU’s plans to officially introduce tariffs on electric vehicles imported from China, the chief economic adviser of German Chancellor Olaf Scholz told Bloomberg TV on Tuesday.

The EU earlier this year imposed provisional tariffs of up to 36% on EVs imported from China, on top of the regular import duty of 10%. The EU member states are expected to vote on Friday on whether to officially impose these tariffs, after finding that China has been heavily subsiding EV manufacturers.

But Germany, Europe’s largest economy and top auto manufacturer, fears the tariffs could unleash an all-out trade war in China, in which its top carmakers would suffer the consequences.

Germany has spoken several times against the EV tariffs and has been recently joined by Spain in hinting the two large economies would abstain in the EU vote.

Germany has not decided yet how it would vote on Friday, Scholz’s chief economic adviser Jorg Kukies told Bloomberg.

German carmakers have a large market in China and as they are integrated in the global supply chain, Germany doesn’t believe tariffs are a good idea, Kukies said.

“A negotiated solution would definitely be preferable to the imposition of tariffs, no matter how calibrated they are,” the adviser told Bloomberg.

The current duties, in effect from July 5, are provisional and for a maximum period of four months. 

The tariffs led to a reaction in China, which is proceeding with anti-dumping investigations of EU imports, targeting brandy and pork imports from the bloc, likely aimed at Spain, France, the Netherlands, and Denmark.

VDA, Germany’s automakers’ association, has said that the “stated goal of ensuring fair competition conditions and protecting the domestic industry from unfair practices will not be achieved” by the anti-subsidy tariffs.

“The European anti-subsidy tariffs would not only affect Chinese manufacturers but also European companies and their joint ventures in particular,” VDA added.

By Tsvetana Paraskova for Oilprice.com

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