German car industry urges EU to drop taxes on Chinese-made cars

THE German Association of the Automotive Industry (VDA) urged the European Commission to drop its planned tariffs on Chinese-made electric vehicles (EVs) on Wednesday (Jul 3), in a last-ditch effort to influence negotiations ahead of the tariffs kicking in on Thursday.

The association highlighted that the tariffs were hurting European and US carmakers exporting from China, and that the risk of retaliation by China with counter-tariffs would hit the German industry hard given its high volume of exports to China.

The value of passenger car exports from Germany to China last year was over three times the value of imports from China, and the value of exports by component suppliers was four times as much as the value of imports, reported the association.

The commission should instead focus on securing access to critical raw materials – many of which are controlled by China – for Europe’s EV industry, including reducing barriers to market access and creating transparency on trade policy, the VDA noted.

It also proposed the creation of a council to discuss such matters.

“Anti-subsidy tariffs are not an adequate measure to strengthen European competitiveness and resilience in the long term,” the association said.

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China and the European Commission have been in negotiations since last week over the curbs that Beijing wants scrapped, rejecting accusations of unfair subsidies.

Brussels has made clear that it expected China to come to technical talks taking place this week with a road map for “addressing the injurious subsidisation” of its EV industry if there were to be a negotiated outcome. REUTERS