Germany strongly opposes the tariffs amid fears of a trade war with China. Meanwhile, Beijing called the move “protectionist” and threatened retaliatory measures.
The European Union voted on Friday to pave the way for tariffs of up to 35.3% on electric vehicles imported from China, a move that might set the stage for a protracted trade war with the Asian giant.
The vote comes after a year-long anti-subsidy investigation by the European Commission, which proposed the tariffs to counter what it sees as unfair Chinese subsidies.
Countries like France, Italy, Greece, and Poland had indicated they would support the tariffs. However, Germany, along with Hungary, Malta, Slovakia and Slovenia, voted against the proposal, according to German broadcaster Deutschlandfunk.
The European Commission, the bloc’s executive arm, will now decide whether the import duties come into force at the beginning of November.
The Commission has said the tariffs could be lifted if China addresses the EU’s concerns. It said in a statement on Friday that it would continue negotiations “to explore an alternative solution that would have to be fully WTO-compatible, adequate in addressing the injurious subsidization established by the Commission’s investigation, monitorable and enforceable.”
Germany, Spain oppose tariffs
Germany, the bloc’s largest economy and a major car producer, has voiced strong objections, fearing the tariffs could harm its automakers, which rely heavily on the Chinese market.
German carmaker Volkswagen criticized the tariffs, calling them “the wrong approach.”
The tariffs range from 7.8% for foreign companies like Tesla, which manufacture vehicles in China, to as high as 35.3% for Chinese companies that reportedly did not cooperate during the investigation.
These tariffs are in addition to the EU’s standard 10% import duty on cars.
Meanwhile, according to a Reuters exclusive report Spanish Economy Minister Carlos Cuerpo wrote to European Commission Vice President Valdis Dombrovskis asking for negotiations to be kept open beyond the vote, instead of imposing tariffs.
Slovakia and Hungary are also against the proposed tariffs.
‘Tariffs to protect European carmakers from unfair competition’
The European Commission, which oversees trade policy for the bloc, argues that the tariffs are necessary to protect European carmakers from unfair competition, as Chinese automakers benefit from substantial state subsidies.
Beijing opposed the tariffs calling them “protectionist” and threatening retaliatory measures.
The United States and Canada have announced 100% tariffs on Chinese EVs, leaving the EU a lucrative market for Chinese EVs.
China has already launched investigations into European imports of brandy, dairy, and pork products, signaling reactive measures.
The European Commission has indicated a willingness to continue negotiations with China, including considering a minimum import price for electric vehicles.
