“Those who invest, create jobs and work with local businesses should benefit from the tariffs.” Volkswagen CEO fears that China’s retaliation will sink European brands

Although several countries such as Germany and Spain have tried to avoid it, the EU has already given the green light to the definitive tariffs on electric cars that are imported to Europe from China. In this way, an additional 10% will now be added to those that have been applied since July to each brand, reaching a maximum of 45% and considerably raising the final prices.

China’s retaliation against this EU protectionist measure against what it considered “unfair competition” will not be long in coming. Meanwhile, European manufacturers such as Volkswagen or BMW They ask the EU to relax tensions instead of unleashing a trade war which could have dire consequences, not only for the automotive industry.

“Those who invest, create jobs and work with local companies should benefit from the tariffs”

“Instead of punitive tariffs, it should be about mutual recognition of investments. “Those who invest, create jobs and work with local companies should benefit when it comes to tariffs,” said Volkswagen CEO Oliver Blume. in an interview with Bild am Sonntag.

The CEO of the German Group believes that the European Union should consider the possibility of adjusting the planned tariffs against electric vehicles manufactured in China. Furthermore, Blume believes that “there is a risk that China’s retaliation to tariffs will harm European car manufacturers.”

The Chinese news agency Xinhua goes furtheras it points out that the European Commission’s decision reveals “a deep protectionist impulse.” “Rather than fostering cooperation, these tariffs risk triggering a trade conflict that could damage not only relations between China and the EU, but also Europe’s own ambition for an ecological transition,” he adds.

“The way forward is clear: protective tariffs must be abandoned in favor of continuing negotiations.” Despite the warnings, everything indicates that after last Friday’s vote, the European Union will continue with its largest trade dispute with Beijing in a decade.

Now the European Commission, the executive arm of the bloc, can proceed to apply the approved tariffs, thanks to the 10 countries that voted in favor of the measure (Bulgaria, Denmark, Estonia, France, Ireland, Italy, Latvia, Lithuania, Poland and the Netherlands), while Germany, Hungary Malta, Slovakia and Slovenia voted against and 12 abstained (Spain among them).

However, these tariffs will not go into effect until October 31 at the earliest. Until then, the European Commission “would continue negotiating to find an alternative.” In principle, the proposed tariffs on electric cars made in China, of up to 45% and valid for five years, would cost automakers billions of additional dollars to get the cars on the block.

China’s Ministry of Commerce has expressed strong opposition to the planned tariffs, calling them “unfair, non-compliant and unreasonable,” and has challenged them at the World Trade Organization. In retaliation, Beijing has started this year import investigations Brady, dairy and pork.

Approving tariffs is “a fatal sign,” says BMW CEO

European imports of electric vehicles made in China have soared in recent years, worrying some manufacturers who fear they will suffer significant losses. In addition, the vote threatens to trigger a broader trade conflict with Beijing, which has already promised to protect its companies.

Now, the EU and China could be studying against the clock the possibility of reaching an agreement on a mechanism to control prices and export volumes that replaces tariffs. Thus, a possible compromise between the two could be to set minimum sales prices.

BMW CEO Oliver Zipse said the European Union’s vote in favor of imposing tariffs of up to 45% on electric vehicles from China is “a fatal signal for the European car industry.” and asked for a quick and negotiated solution.

“The fact that Germany voted against the tariffs is an important signal and increases the chances of a negotiated agreement,” said Zipse, former president of ACEA, the European Automobile Manufacturers Association and the industry’s main lobby group. of the automobile in the European Union.

In the same vein as Volkswagen or BMW, Mercedes-Benz points out that the vote could have “far-reaching negative consequences” and called for a negotiated solution, as well as a postponement of the application of the measures. Chinese brands with a large presence in Europe criticized the vote, including Zhejiang Geely Holding, which counts among its subsidiaries Volvo, as well as Poletar, Lynk & CO, Zeekr and Lotus, and has a 50% stake in Smart.

The President of the German Automotive Industry Association, Hildegard Müller, also warns that the proposed tariffs would increase prices for consumers, in addition to risking a trade war. “The potential harm that countervailing duties could cause is therefore greater than the potential benefits of the instrument.”

Many European Economy Ministers supported the continuation of negotiations to avoid a trade war, among them the German Christian Lindner and the Spanish Carlos Cuerpo.