EU’s push for tariffs on Chinese EVs faces backlash from member states, auto industry

A consultation between China and the European Commission on the EU’s anti-subsidy case involving Chinese electric vehicles is held in Brussels, Belgium, Sept. 19, 2024. European countries and auto industry leaders have criticized the EU’s push for punitive tariffs on Chinese electric vehicles (EVs), warning the move could boomerang and, in turn, hurt the EU’s competitiveness. Though the European Commission said it had secured necessary support from member states, 12 EU members abstained and five voted against the decision. Meanwhile, the Commission also called on the two sides to explore an alternative solution. (Xinhua/Meng Dingbo)
BRUSSELS, Oct. 5 (Xinhua) — European countries and auto industry leaders have criticized the EU’s push for punitive tariffs on Chinese electric vehicles (EVs), warning the move could boomerang and, in turn, hurt the EU’s competitiveness.
Though the European Commission said it had secured necessary support from member states, 12 EU members abstained and five voted against the decision. Meanwhile, the Commission also called on the two sides to explore an alternative solution.
 
OPPOSITION FROM MEMBER STATES
The loudest outcry against the tariff came from Germany.
“Tariffs on Chinese electric cars would be wrong … We have to speak plainly and negotiate with China – but trade wars only have losers,” said German Finance Minister Christian Lindner Thursday on X, former Twitter, in the wake of Chancellor Olaf Scholz’s call for continuing negotiations with China on Wednesday.
Echoing these concerns, Hungary voted against the imposition. “What they are making us do right now, or what the EU wants to do, is an economic Cold War,” Hungarian Prime Minister Viktor Orban told state radio in a Friday interview, referring to the proposed EU tariffs.
Matjaz Han, Slovenia’s minister of economy, tourism and sport, also voiced opposition to the tariffs, warning of “too high a price” for Europe. Instead, he advocated for more practical economic and trade cooperation between the EU and China.
Finland abstained from the Friday vote. Jukka Kuurma, a senior Finnish foreign ministry official, told local media that there was not enough proof of damage caused to the EU by the “so-called” Chinese state support to the EV industry. “We are not quite convinced that the import tariffs would be in the overall interest of the Union,” Kuurma said.
Spain was also among the countries that abstained from the vote. Spanish Minister for Economy, Trade and Business, Carlos Cuerpo, said the decision to abstain was to keep the negotiation with China open and find a negotiated solution.
 
INDUSTRY OUTCRY
The Commission’s announcement on the controversial tariffs has provoked an outcry from the European automotive industry. They warned that the move may hurt the competitiveness of local carmakers and undermine the interests of consumers.
In a statement released on Friday, Hildegard Muller, president of the German Association of the Automotive Industry, depicted the vote as a further step away from global cooperation.
Germany’s auto giant Volkswagen also issued a statement, calling for a negotiated solution. The planned tariffs, it said, are the wrong approach and would not improve the competitiveness of the European auto industry.
“Today’s vote is a fatal signal for the European automotive industry,” BMW CEO Oliver Zipse told local media. “Now a quick solution is needed between the European Commission and China to prevent a trade conflict that will ultimately only have losers.”
Mercedes also fretted about its negative effects on the industry. “We are convinced that punitive tariffs worsen the competitiveness of an industry in the long term,” a spokeswoman was quoted by German news agency DPA as saying.
On top of harming competitiveness, industry insiders also believe the tariffs could undercut the interests of European consumers.
“Ultimately, tariffs won’t help anyone, they will only harm European consumers, who will lose out, as well as the countries themselves,” said Hrvoje Prpic, president of the Croatian Electric Vehicle Drivers Association.
 
CALL FOR NEGOTIATION
Following the EU announcement, the China Chamber of Commerce to the EU (CCCEU) expressed deep disappointment over and strong dissatisfaction with the EU’s adoption of protectionist trade measures.
“We strongly encourage the EU to approach the final measures with caution, delay the implementation of these tariffs and prioritize resolving disputes and trade tensions through consultations and dialogue,” the CCCEU said in a statement on Friday.
In an interview after the EU vote, Holger Goerg, director of the Kiel Centre for Globalization, told Xinhua that he hoped that both sides would maintain a cool head and remain at the negotiating table as negotiations between China and the EU are still ongoing.
In a joint statement, the largest single trade union in Germany IG Metall and the works councils of major car manufacturers in Germany proposed an alternative CO2-oriented trade and support regime that applies equally to all manufacturers.
“In view of the future prospects for hundreds of thousands of employees at German car manufacturers and their suppliers, we say unequivocally: tariffs are the wrong approach…,” it said. ■