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Germany warns EU against 'trade war' over China EV tariffs
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A VW employee presents the new model of the electric Volkswagen ID 3 car of German carmaker Volkswagen at the production site in Dresden, Germany, on March 1, 2023. (AFP/Jens Schlueter)
B
erlin warned the European Union on Friday against triggering a "trade war" with Beijing after members definitively backed extra tariffs on Chinese electric cars while German auto titans also voiced alarm.
"The EU Commission of Ursula von der Leyen should not trigger a trade war despite the vote in favor" of the tariffs, Finance Minister Christian Lindner said on social media platform X.
"We need a negotiated solution."
Germany was among five countries that voted against the move, fearing it could spark retaliatory measures against its auto manufacturers, which are heavily invested in China.
But 10 member states voted in favor, giving a definitive green light to imposing the tariffs of up to 35.3 percent, which come on top of existing duties of 10 percent, several European diplomats told AFP.
German auto titan Volkswagen -- which is Europe's biggest carmaker, and makes around a third of its sales in China -- said the extra duties "were the wrong approach and would not improve the competitiveness of the European automotive industry."
It called on the EU and China to continue talks with the aim of a "political solution" before the new tariffs come into effect at the end of October.
"The common goal must be to prevent any countervailing duties and thus a trade conflict."
Oliver Zipse, CEO of German luxury carmaker BMW, said the tariffs were a "fatal signal for the European automotive industry" and called for a "quick settlement" between the EU and China.
But he added: "The fact that Germany voted against the tariffs is an important signal and increases the chances for a negotiated settlement."
Retaliatory steps by Beijing would be a heavy blow for Germany's auto giants, which have already been struggling in China due to its economic problems and fierce competition from local rivals, particularly for EV sales.
