E-car trade dispute with China: EU tariffs: How German car manufacturers react
by Stephanie Barrett and Anne Sophie Feil
In the trade dispute with China, the EU has agreed to punitive tariffs on electric cars. Germany was against it. The decision in Brussels is a “fatal signal,” warns BMW boss Zipse.
After the approval of EU tariffs on electric cars from China, the country is continuing to negotiate. German car manufacturers like VW are now wondering what countermeasures would mean for them.04.10.2024 | 2:35 minThe EU accuses China of massively subsidizing its production of electric cars and thus giving European car manufacturers unfair competition with cheap exports. That’s why 27 EU members voted today on a proposal from the EU Commission.
However, German car manufacturers are vehemently against punitive tariffs because they fear retaliatory measures from China that could affect their business in the important sales market.
Ten EU states have cleared the way for EU tariffs on electric cars from China.04.10.2024 | 2:43 minutes
BDI: Stay in touch with China
The Federation of German Industries (BDI) generally supports the use of trade protection instruments to protect the European market economy from government market distortions if the conditions are met. At the same time, the interest of European industry in stable economic relations with China must also be taken into account in a balanced manner.
The decision on countervailing duties in the electric car market must under no circumstances mean the end of the talks.
Tanja Gönner, BDI general manager
China also depends on good trade relations with Europe. China’s investment and export-led growth model is also under pressure. More and more countries are resisting market distortions by the Chinese state. The North American market in particular is increasingly closing itself off to Chinese products with high tariffs. Access to the EU is therefore of central importance for China’s export industry.
If the EU were to introduce tariffs on Chinese electric cars, German car companies in particular would be “concerned about Chinese countermeasures,” said ZDF correspondent Florian Neuhann.04.10.2024 | 2:28 minutes
BMW boss: “Fatal signal” for the automotive industry
Volkswagen, BMW, Mercedes and the automobile association VDA are therefore calling for negotiations to continue between the EU Commission and China in the coming weeks. Because: “Today’s vote is a fatal signal for the European automotive industry,” said BMW boss Oliver Zipse. “A quick negotiated solution is now needed. The fact that Germany voted against the tariffs is an important signal and increases the chances of a negotiated solution with China.”
Mercedes boss Ola Källenius also warns of tariffs:
We are convinced that punitive tariffs will worsen the competitiveness of an industry in the long term.
Ola Källenius, CEO of Mercedes
Isabelle Schäfers and Stephanie Barrett on tariffs.04.10.2024 | 2:07 mins
The high taxes would not only affect Chinese electric car manufacturers who sell their cars to Europe. Since 2018, German car manufacturers have been producing more cars in China than in Germany. “The tariffs would also make their electric cars more expensive,” explains Hildegard Müller, President of the Association of the Automotive Industry (VDA). This also has an impact on consumers, explained DIHK foreign trade director Volker Treier:
Although the tariffs could also stimulate production in the EU, there is initially a risk of higher prices for consumers and a certain loss of purchasing power.
Volker Treier, German Chamber of Commerce and Industry
The German auto industry also fears an escalation of the trade dispute with China. The People’s Republic is Germany’s most important trading partner after the USA. A counterattack by the Chinese would have a serious impact on the German export industry.ZDF correspondent Isabell Schäfers knows when the EU tariffs against China will come.04.10.2024 | 0:57 minutes
DIW President Fratscher: EU protects business location with punitive tariffs
German car manufacturers depend more on business in China than any other nation. Although France’s automobile industry also suffers from cheap Chinese imports, it does not export as many vehicles there. VDA President Müller also emphasizes:
The German auto industry sells 100 times more cars in China than the other way around. We are a global industry, 70 percent of our jobs depend on it.
Hildegard Müller, President of the Association of the Automotive Industry
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, believes the resistance to countervailing duties on Chinese electric cars is wrong. The German economy is too focused on short-term profits, but the EU must protect its business location.
It would be a fatal mistake if the EU allowed Chinese products to displace European products from the market, as is the case in the solar industry.
Marcel Fratzscher, President of the German Institute for Economic Research
“Almost all major countries have now introduced tariffs against China” in the e-automotive industry. If the EU does not react, this will be “an additional burden,” says Manfred Weber from the CSU.04.10.2024 | 5:14 minutes
It is questionable whether the countervailing tariffs against China will really help the European automobile industry, because the fact is that battery-electric cars are likely to become more expensive with the tariffs and thus slow down the already sluggish sales.
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Source: ZDF
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Source: with material from Reuters, AFP and dpa
