The automotive industry warns of punitive tariffs on Chinese electric cars

Shortly before the expected implementation of provisional EU tariffs on Chinese electric cars, the Association of the Automotive Industry (VDA) vehemently warns of the consequences for the domestic economy. The tariffs are neither purposeful for the EU nor for Germany, according to a key issues paper available to the German Press Agency. The association warns of the "enormous" damage that could be caused by potential countermeasures from Beijing. China is the largest car market in the world and, according to the VDA, was the third-largest export market for cars from Germany in 2023, after the USA and the United Kingdom.

Warning about Chinese tariffs

Should import duties from Beijing on vehicles with an engine of more than 2.5 liters displacement be introduced, this would hit the industry hard, according to the lobby association. In 2023, about one-third of the vehicles exported from Germany to China fell into this category. Additionally, high taxes cannot achieve the declared goal of ensuring fair competitive conditions and protecting the domestic industry from unfair practices. On the contrary, they would hinder the expansion of electromobility and thus the achievement of climate goals, the association emphasizes.

Security deposit as tariffs

The EU Commission is expected to publish the necessary details on Thursday so that the provisional tariffs can come into effect. If that is the case, these will be collected from midnight on July 5th through a security deposit. However, whether the tariffs of up to 38.1 percent are actually retained depends on whether another solution can be found with China, according to the details.

By November at the latest, the EU member states must decide whether long-term tariffs will also be introduced. In this case, the provisional tariffs would then be retroactively applied in certain cases. The decision to threaten with tariffs was accompanied by an investigation by the EU authority, which concluded that Chinese electric car manufacturers benefited from unfair subsidies. This posed a risk of harm to manufacturers in the EU.