“Many jobs at risk”
Auto industry rejects EU punitive tariffs against China
April 13, 2024, 12:23 p.m
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The EU is currently examining in several areas whether China is subsidizing individual sectors of the economy. The focus is also on the automotive industry. The German industry is now warning of sanctions from Brussels. These could actually create new problems.
Before Chancellor Olaf Scholz’s trip to China, the Association of the German Automotive Industry (VDA) spoke out against EU punitive tariffs on electric cars from the People’s Republic. EU steps currently being examined against subsidies for the industry in China “could not solve the challenges facing the local auto industry – on the contrary,” said association president Hildegard Müller to “Welt am Sonntag”. Countervailing duties could “quickly have a negative impact in the event of a trade conflict.”
Müller demanded that “both sides be willing to engage in dialogue” regarding the EU anti-subsidy investigation. The current business with China secures “a large number of jobs in Germany”. According to the VDA President, a trade conflict would also endanger the transformation towards electromobility and digitalization. This is also financed from money generated by the German car industry in China.
According to “Welt am Sonntag”, the market share of electric cars from China in Germany rose to ten percent in the first three months of the year. This is shown by an evaluation by the consulting firm EY, which was available to the newspaper. In the comparable period last year, Chinese car brands still had a market share of seven percent.
While other car manufacturers’ electric sales shrank, suppliers from China were able to increase their sales. “Chinese companies are currently trying to push their products onto the market,” EY partner Jan Sieper told the newspaper.
In September, Commission President Ursula von der Leyen announced a competition investigation into market distortions caused by Chinese subsidies for electric cars. World markets were being flooded by “cheaper Chinese electric cars,” she said at the time. If the investigation shows that Beijing is breaking international trade law rules, Brussels could impose punitive tariffs on Chinese vehicles.