German car industry, government react against EU EV tariffs as BMW faces 21% duty

5 months ago 17

The German car industry association VDA and senior government ministers criticised the EU’s preliminary tariffs on China-made electric cars announced today (12 June), which will also hit European companies producing in China, such as BMW and Dacia.

The European Commission announced preliminary tariffs on imported Chinese electric cars, known as ‘countervailing duties’, which will be in the range of 17% to 38%. This was in response to Chinese subsidies for the electric vehicle supply chain, which distort prices of China-made electric vehicles (EVs), according to the Commission.

VDA, representing carmakers such as Volkswagen, BMW, and Daimler, strongly criticised the decision, with its president, Hildegard Müller, warning it was “a further step away from global cooperation”.

“This measure further increases the risk of a global trade conflict,” she added.

European carmakers producing electric vehicles in China will also be affected, the largest group of which are Dacia and BMW, which will face a 21% import duty.

This is even higher than Chinese carmaker BYD, which will see a lower tariff of 17.4% as it participated in a Commission-led investigation and provided evidence that it had benefitted from less state support.

US carmaker Tesla will also face a 21% duty for its China-made models, but has applied for a reduced rate, while other carmakers have yet to do so.

All new tariffs come on top of a 10% duty the EU already applies on imported electric vehicles.

European carmakers association ACEA, whose members have more diverse interests, said only that they “take note” of the decision.

German government pushes for negotiations

German Transport Minister Volker Wissing (FDP/Renew) was quick to post on X that “the EU Commission’s punitive tariffs affect German companies and their top products”.

“Vehicles must become cheaper through more competition, open markets and significantly better business conditions in the EU, not through trade wars and market compartmentalisation,” he wrote.

Similar statements were made by Economy Minister Robert Habeck (Greens), who told German media that “tariffs are always only the last resort as a political measure and are often the worst option” .

“It is crucial that there are talks now,” he said, calling for EU-China negotiations.

China needed to address climate change

German companies are also worried about potential retaliation by China, with Business Chamber DIHK’s Volker Treier warning that “the tariffs announced by the Commission on e-cars from China will not be without consequences for the heavily export-orientated German economy”.

The fear was further fuelled by a reaction from the Chinese Ministry of Commerce, which said it was ready to “take all necessary measures” to defend its manufacturers’ interests.

VDA’s Müller called on the EU and China to solve the issue through negotiations, adding that “it is also up to China to approach Europe with constructive proposals and to stop competition-distorting behaviour consistently and quickly in order to avoid an escalation of trade conflicts”.

“We need China to solve global problems,” including climate change, Müller said. “A trade conflict would also jeopardise this transformation.”

Her criticism of the tariffs was not shared by Europe’s clean transport NGO Transport & Environment (T&E), which welcomed the tariffs.

“The EU Green Deal came with the promise of growth and jobs, and that’s not possible if our EVs are all imported,” the organisations EV expert Julia Poliscanova said in a statement.

[Edited by Donagh Cagney/Zoran Radosavljevic]