EU states clear the way for car tariffs against China
Published: Friday, Oct 4th 2024, 14:30
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The EU can impose additional tariffs on electric cars from China despite opposition from Germany. Several EU diplomats confirmed to Deutsche Presse-Agentur that a sufficient majority of EU member states have not spoken out against the plan.
However, there was also no clear vote in favor of the tariffs. This means that the EU Commission can decide to introduce duties of up to 35.3 percent. German car manufacturers reacted with concern and are now hoping for a negotiated solution.
Allegation of unfair subsidies
The European Commission announced the additional tariffs after an investigation concluded that Beijing was subsidizing e-cars, which distorted the market in the EU. It is up to the Commission to decide whether the import duties will come into force within the next month. However, if a solution is reached with China at the negotiating table in time, the tariffs can be stopped.
Germany was unable to assert its position. The most populous EU country voted against the tariffs in Brussels. However, in order to be able to prevent them, a majority of the EU states, which together make up at least 65% of the total population of the EU, would have had to speak out against the project.
With a simple majority, the EU member states could at least have persuaded the Commission to convene a conciliation committee. But this majority was not achieved either.
According to diplomatic circles, ten EU states ultimately voted in favor of the measure, while twelve abstained. Only five were openly against the tariffs. According to the figures, those against the tariffs represent a good 20 percent of the EU population.
Scholz puts his foot down
The German government was also divided on the EU customs dispute until Chancellor Olaf Scholz (SPD) decided to reject it shortly before the vote. His coalition partners, the Greens and FDP, saw this as an exercise of his authority to issue directives. The Federal Press Office did not wish to comment on the vote when asked.
According to the Basic Law, the Chancellor determines the policy guidelines in the Federal Government. Formally, however, this authority to issue guidelines is only exercised extremely rarely. Scholz formally exercised this option in the dispute between the FDP and the Greens over nuclear power plant lifetimes by writing a letter to his cabinet.
In the traffic light coalition, the FDP-led ministries of finance and transport urged Germany to say no in Brussels. Scholz was also critical of punitive tariffs. The Green-led economic and foreign ministries had argued in favor of abstaining from the vote in Brussels in order to continue the search for a negotiated solution with China.
Concerns in the German economy
German car manufacturers are also insisting on a negotiated solution. The head of BMW, Oliver Zipse, for example, warned: "Today's vote is a fatal signal for the European automotive industry." Business associations expressed similar sentiments.
The German Chamber of Industry and Commerce (DIHK) warned that extra tariffs would not be without consequences for the export-oriented German economy. "Although the tariffs could also stimulate production in the EU, there is initially a risk of higher prices for consumers and a certain loss of purchasing power," explained DIHK head of foreign trade Volker Treier.
No impact for Switzerland
According to experts at the Swiss government, EU punitive tariffs on e-cars from China have no impact on Switzerland. Switzerland is under no obligation to comply with trade defense measures or other EU tariff decisions, a spokesperson for the State Secretariat for Economic Affairs (Seco) told the Keystone-SDA news agency in July, when the European Commission introduced provisional punitive tariffs.
©Keystone/SDA
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