EU Approves Tariffs on Chinese Electric Vehicles Amid Trade Tensions

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Germany is firmly opposed to the proposed tariffs due to concerns about the potential for a trade war with China. In response, Beijing has condemned the tariffs as "protectionist" and has warned of possible retaliatory measures.

The European Union voted on Friday to establish tariffs of up to 35.3% on electric vehicles imported from China, a decision that could lead to a prolonged trade conflict with the Asian nation.

This vote follows a year-long anti-subsidy investigation conducted by the European Commission, which proposed these tariffs to combat what it perceives as unfair subsidies provided by the Chinese government.

Countries such as France, Italy, Greece, and Poland expressed their support for the tariffs, while Germany, alongside Hungary, Malta, Slovakia, and Slovenia, voted against the proposal, as reported by German broadcaster Deutschlandfunk.

The European Commission, which serves as the executive arm of the EU, will determine whether the import duties will take effect at the beginning of November. The Commission has indicated that these tariffs could be lifted if China addresses the EU's concerns. In a statement released on Friday, it emphasized that negotiations would continue "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, as the largest economy in the bloc and a key player in the automotive industry, has raised significant objections to the tariffs, citing concerns that they could adversely impact its automakers, who heavily rely on the Chinese market.

Volkswagen, a major German car manufacturer, criticized the tariffs, describing them as "the wrong approach." Additionally, the German Automotive Industry Association (VDA) labeled the vote as a "further step away from global cooperation." VDA President Hildegard Müller urged both parties to prevent escalation and ideally halt the tariffs to avoid the risk of a trade war.

The proposed tariffs vary, starting at 7.8% for foreign companies like Tesla, which produce vehicles in China, and reaching as high as 35.3% for Chinese firms that reportedly did not cooperate during the investigation. These tariffs would be in addition to the EU's existing standard import duty of 10% on cars.

In a related development, Spanish Economy Minister Carlos Cuerpo sent a letter to European Commission Vice President Valdis Dombrovskis requesting that negotiations remain open beyond the vote instead of implementing tariffs. Slovakia and Hungary also opposed the proposed tariffs.

The European Commission argues that these tariffs are essential for protecting European car manufacturers from unfair competition, noting that Chinese automakers benefit from considerable state subsidies. Beijing has condemned the tariffs, labeling them as "protectionist" and warning of potential retaliatory actions.

In a broader context, the United States and Canada have already implemented 100% tariffs on Chinese electric vehicles, making the EU a lucrative market for these imports. In response to the EU's actions, China has initiated investigations into European imports of brandy, dairy products, and pork, indicating possible retaliatory measures.

The European Commission has shown a willingness to engage in continued negotiations with China, including the possibility of establishing a minimum import price for electric vehicles.