German Transport Minister opposes EU tariffs on Chinese electric vehicles, citing economic consequences

Volker Wissing

26th September 2023 – (Berlin) The German Transport Minister, Volker Wissing, has expressed his opposition to the potential imposition of protective tariffs by the European Union (EU) on Chinese electric vehicles (EVs). In an interview with the Augsburger Allgemeine newspaper, Wissing criticized the idea of erecting trade barriers, stating that such measures not only impede market access but also have detrimental effects on global prosperity.

Wissing emphasized the importance of ensuring competitive production of electric vehicles in Germany for both domestic and global markets. He cautioned against a trade war, highlighting the risks of economic damage that could extend beyond the automotive sector.

Experts have echoed Wissing’s concerns, particularly regarding the threat to the German car industry, for which China represents the largest customer base. Ferdinand Dudenhoeffer, director of the CAR Center Automotive Research Duisburg, emphasized the need for cooperation with China instead of engaging in a trade war. He emphasized the significant risk associated with the potential tariffs.

German automaker Volkswagen, for instance, delivered more than one in three of its vehicles to Chinese customers in August. The imposition of tariffs would pose a serious threat to the company. In the first quarter, motor vehicles and parts constituted Germany’s top-selling product in China, amounting to a value of 6.3 billion euros (6.68 billion U.S. dollars), according to official figures.

Decoupling from China economically would have severe consequences for Germany, with an estimated 2 per cent drop in gross domestic product (GDP). This would result in annual losses of 57 billion euros, according to a recent study conducted on behalf of the Foundation for Family Businesses.

China and the EU have significant potential for cooperation and share common interests in the automotive industry, according to a spokesperson from China’s Ministry of Commerce. Over the years, they have developed a pattern of mutual support.

Leading German automaker Volkswagen has reaffirmed its commitment to China through its “In China for China” campaign. The company recently acquired a 4.99 per cent stake in the Chinese electric vehicle startup XPeng. Additionally, Volkswagen’s subsidiary, Audi, has expanded its collaboration with its Chinese joint venture partner, SAIC.

Other automakers, such as Geely and Daimler, have also established close cooperation. In light of these partnerships, Minister Wissing emphasized that wealth gains are achieved through international trade in global markets.