Germany has voted to oppose a proposal by the European Commission to introduce additional tariffs on electric cars imported from China. This was no surprise: in the days leading up to today’s meeting, German chancellor Olaf Scholz and other government officials in Berlin had made clear that they had instructed the country’s representative not to vote in favour of such tariffs, widely described as ‘punitive’.
Alongside Germany, Hungary, Slovakia, Malta and Slovenia voted against the introduction of the tariffs. A majority of states representing at least 65 per cent of the population in the EU – or 14 of the bloc’s members states – would have been needed to stop the Commission’s plans. The Commission aims to put up additional tariffs of up to 35.3 per cent on electric cars from China.
German car manufacturers are also concerned that their business could be heavily affected
When the issue was first raised, the German government was divided on the issue of possible punitive tariffs against Chinese electric cars, but ministries led by the Free Democrats insisted on taking a strong stance against them. Scholz also voiced his concerns over such a forceful approach against China. Ministers belonging to the Greens, the third party within the coalition in Berlin, wanted Germany to abstain in order to further negotiate with Beijing. In the end, the difference between a clear-cut no and an abstention from voting seemed almost negligible, as the German government realised that it couldn’t convince enough other member states.
Following the vote, Germany’s finance minister and chairman of the Free Democrats Christian Lindner stated that he fears an escalation of the trade policy dispute with China. ‘We need a negotiated solution,’ he wrote on X. Lindner also hopes that Friedrich Merz, the leader of Germany’s Christian Democrats, could convince fellow Christian Democrat member Ursula von der Leyen, who presides the Commission, to rework Brussels’ strategy towards such imports.
German business figures are highly concerned about the introduction of these punitive tariffs, which will kick in as early as at the beginning of November. Their introduction would be ‘another step away from global cooperation’, Hildegard Müller, the chairwoman of the German Association of the Automotive Industry, said in a statement. Müller, like other business representatives, spoke of the potential threat of a ‘trade conflict’ with the powerful People’s Republic.
Meanwhile, German car manufacturers are also concerned that their business could be heavily affected, as the likes of BMW and Volkswagen produce a significant number of electric cars through joint ventures in China. BMW’s CEO Oliver Zispe called today’s decision a ‘disastrous signal’ for the European car industry. The fact that Germany voted against the tariffs might keep the door open for a solution at the negotiating table, he said. Other car manufacturers, including Mercedes-Benz, hope the same.
The European Commission came up with the idea of additional tariffs on electric cars after an inquiry indicated that Beijing has subsidised the production of such cars. This would, they reasoned, affect competition on the EU market. While today’s decision is another step towards additional tariffs, there is still time for the Commission and China to come to an agreement on the issue. Germany may hope to play a major role in bringing both sides together, given the fact that the country’s influential car industry would be negatively affected by the Commission’s plans. Time will tell if they are hoping in vain.