A vote on imposing tariffs on Chinese electric vehicles has underlined deep schisms within the European Union.
The crucial vote, which saw Germany side with Xi Jinping and China, could result in extra taxes placed on imported Chinese EVs in an attempt to stop Beijing from undercutting their European competitors.
This morning Berlin voted against the measures, after lobbying by German car manufacturers keen to avoid a tit for tat retaliation from one of their biggest export markets.
Christian Lindner, Germany’s finance minister called for a “negotiated solution” as he stressed the importance of avoiding a “trade war”.
German car manufacturer Volkswagen today warned that the EU was taking “the wrong approach” and urged further talks with Beijing to avoid an escalating trade dispute.
Prior to the vote, the powerful German auto workers union IG Metall said: “We say unequivocally: tariffs are the wrong approach because they will not improve the competitiveness of the European automotive industry.”
The decision comes following an EU investigation which found China’s electric car industry had received “unfair” state subsidies at every level, which meant that carmakers were able to undercut their European rivals on price.
Despite Germany’s protestations, 10 EU member states backed the motion – paving the way for the bloc to impose tariffs of up to 45% on imports of Chinese-made electric vehicles and Beijing wasted little time in responding.
Following the vote, The Chinese government announced it would launch investigations into imports of EU brandy, dairy and pork products to the country.