German Car Makers Face Counter-Tariffs from China: The Urgent Call to Avoid Harmful Trade Dispute.

The German automotive industry is deeply concerned about potential counter-tariffs from China that could impact manufacturers heavily exporting to the country. The VDA, an advocacy group representing the German automakers, has called on the European Commission to exempt tariffs on Chinese electric cars in order to avoid harming European and US manufacturers who also export to China.

China’s retaliation with counter-tariffs is a fear that could particularly affect the German car industry due to its significant exports to China. Negotiations between China and the EU are ongoing, but the urgency of the situation led to a last-minute plea from the VDA to influence these negotiations before customs duties are implemented.

The EU previously decided to impose punitive tariffs on electric cars from China, with rates ranging from 17-38 percent, but these negotiations continue. The Commission accuses China of providing unfair support to local electric car manufacturers, while China denies these allegations.

Trade with China is crucial for German automakers, with about 30 percent of sales coming from China. Germany is a major exporter of at least 2.5-liter combustion engine cars this year, highlighting the importance of the Chinese market for the German automotive industry. In response, Chinese car manufacturers have called for increased customs duties on European gasoline cars in response to the tariffs imposed by the EU.

The VDA emphasizes that securing access to critical raw materials for the European electric car industry and reducing trade barriers are necessary instead of imposing tariffs. The impact of these tariffs on consumer prices in countries like Finland remains uncertain, but additional costs are a possibility. The issue of customs duties has received mixed responses in different European countries, with support in France and opposition in Germany, Sweden and Hungary.