The German Chamber of Commerce in China has called on the European Union (EU) to focus on boosting its competitiveness rather than increasing tariffs on electric vehicles (EVs) manufactured in China.
This statement aligns with Berlin’s efforts to either prevent or mitigate the impact of new trade restrictions.
Last week, the EU Commission decided to impose additional tariffs on EVs imported from China, raising the duties to as much as 48 per cent.
These measures primarily target Chinese automakers, including BYD, Geely, and SAIC Motor, which have been accused of market distortion through state subsidies.
“The tariffs suggested by the EU will not enhance the competitiveness of the automotive industry,” stated Maximilian Butek, Executive Director of the German Chamber of Commerce in Eastern China.
“You cannot protect the automotive industry solely within the EU if it is a global market,” he added in a press release accompanying the chamber’s business confidence survey.
The German government is actively working to either prevent the implementation of these new EU tariffs on Chinese electric vehicles or at least soften their impact.
Beijing has already threatened retaliatory measures affecting sectors such as agriculture, aviation, and large-engine automobiles.
Such retaliation could harm German manufacturers like Volkswagen, Mercedes-Benz, and BMW, who heavily rely on sales in the world’s largest automotive market.
Butek highlighted that German companies had not previously complained about Chinese subsidies in the electric vehicle sector before the EU’s investigation.
According to the chamber’s survey conducted in late May, the primary challenge these companies face is price pressure due to overcapacity.
“But our companies are quite aligned on this: they can only survive by becoming more competitive,” Butek noted.
Three-quarters of German companies in China reported overcapacity in their industries, with 20 per cent describing it as substantial.
Most viewed this overcapacity as a recent issue, with around half indicating it began last year, and 35 per cent stating it emerged in the past five years.
The survey also revealed a slightly more positive outlook on China compared to last year among German companies, although fewer are planning short-term investment increases.
About 38 per cent of respondents expected a worsening outlook for their industries this year compared to last year, a decrease from 52 per cent in September.
Just over half plan to increase investment in the next two years, down from 61 per cent the previous year.
