In view of the expected flood of Chinese electric vehicles onto the market in Europe – and thus also in Germany – Brussels now wants to pull the ripcord. Imports of electric cars from China are to be subject to hefty tariffs – due to high Chinese subsidies. These are now to be offset by import duties. The punitive tariffs are to range from 17.4% for BYD to 38.1% for car manufacturer SAIC. This is not quite as much as in the US, where punitive tariffs of 100% have been imposed on Chinese cars. The tariffs are intended to make cars from China significantly more expensive and thus considerably less attractive to buyers. Will the Chinese simply accept this?

Hardly! China's Ministry of Commerce has sharply criticised the EU's announcement and has already hinted at countermeasures. That's how it is with tariff restrictions. If you take away my red baking tin, I'll take your blue scoop. A trade war cannot be won – by anyone. There are only losers. Quite the contrary: „You think you're cutting the Chinese, but you might be cutting yourself,“ as Bavarian Minister of Economic Affairs Hubert Aiwanger put it succinctly. The background to this is that many cars made in China will also be subject to punitive tariffs., those from German companies are manufactured in China.

But it gets much worse! If the Chinese respond with counter-tariffs, it will be the end of the road for some German car manufacturers. Around 80 per cent of all vehicles produced by German manufacturers Volkswagen, Mercedes and BMW are built for export, with most going to China.

The whole dilemma was predictable. We had already pointed this out in two articles, such as on 5 March and on 17 May. The EU's motives are understandable, but very short-sighted. In today's interconnected world, we should ensure that our own products can be manufactured in such a way that they are competitive on the global market. Excluding much cheaper products from competitors from one's own market in order to protect one's own products can no longer work today. In this respect, Federal Transport Minister Volker Wissing is certainly right when he sums up the threatened punitive tariffs: „It would be a disaster for Germany and it would not be beneficial for the European Union either.“ 

Further sources:

https://www.tagesschau.de/wirtschaft/weltwirtschaft/china-kritik-zoelle-e-autos-100.html

https://www.zeit.de/wirtschaft/2024-06/elektroautos-eu-zoelle-china-kritik