German ministers warn against EU tariffs on Chinese EVs

BERLIN, May 31: Several German ministers have expressed concerns about possible European tariffs on Chinese electric vehicles (EVs), as the European Union (EU) is due to reveal the results of its so-called “anti-subsidy investigation” soon, reported Xinhua.

The senior German officials expressed concerns that the move could backfire, harming Europe’s largest economy and its carmakers and undermining fair international trade, rather than protecting the EU’s industry as intended, according to local media reports on Wednesday.

The United States announced new tariffs earlier this month on a variety of imports from China, including EVs, whose tariffs were raised to 100 percent in addition to existing ones. Last October, the European Commission launched an anti-subsidy investigation into the imports of EVs from China.

Imposing tariffs on Chinese EVs to protect the European industry would be the “wrong approach” to promoting international competition, Volker Wissing, Germany’s Federal Minister for Digital and Transport, told Euractiv in an interview.

Wissing strongly suggested that it is global competition that incentivises German car manufacturers to build better and more affordable products and that he is confident that the German vehicle industry would survive the competition.

Wissing criticised the European investigation, saying that it is based on mere suspicion and asserting that the EU’s approach is wrong. The right approach “must always be to create fair competition instead of working to hinder it,” he said.

“I am puzzled that some people are now calling for competition to be restricted by the state,” said the minister, adding that the move has deviated from a market economy.

Robert Habeck, Germany’s economics minister and vice-chancellor, also warned of damage to the EU’s interests through tough tariffs against China. He told the Rheinische Post on Wednesday that he calls for fair, open, and equally competitive world trade, instead of protectionism.

Habeck noted that China has long been an important trading partner for the EU, and when considering tariffs on Chinese EVs, the EU “needs to consider in the medium and long term.”

The German news agency DPA quoted the country’s Finance Minister Christian Lindner as saying that the possible tariffs should be considered measuredly, insisting that the free and fair world trade should not be weakened.

Previously, German Chancellor Olaf Scholz also cautioned against European tariffs on Chinese EVs.

He expressed reservations about possible tariffs at a press conference in Stockholm two weeks ago when asked whether he supported the EU in following the US lead with hefty levies.

Scholz stressed the importance of trade between the West and China, noting that 50 per cent of electric car imports from China come from Western brands that produce cars there.

“There is an exchange from both sides. European and even some North American manufacturers are successful in the Chinese market,” Scholz said. “We have to take that into account.”