China Warns EU Tariffs On EVs Will Harm Trade With Germany

Ahead of the European Union’s decision on tariffs for Chinese electric vehicles, China’s commerce minister has issued a stark warning about the potential negative impacts on trade, especially with Germany.

What Happened: China’s commerce minister warned that the European Union’s impending tariffs on electric vehicles would significantly disrupt trade and investment, particularly in Germany, Reuters reported on Wednesday.

During discussions on Tuesday with German Vice Chancellor and Economic Minister Robert Habeck, Wang Wentao emphasized the need to find a solution that aligns with World Trade Organization rules to prevent escalating economic and trade tensions between China and the EU.

The European Commission is set to propose final tariffs of up to 35.3% on Chinese-built EVs, in addition to the EU’s standard 10% car import duty. Wang is in Europe to discuss the EU’s anti-subsidy case against Chinese-made EVs before a vote on additional tariffs.

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Wang urged Germany to advocate for a cooperative approach between the European Commission and China. Habeck responded by affirming Germany’s support for free trade and welcoming Chinese automotive investments in Europe. He committed to urging the European Commission to seek a suitable resolution with China to avoid trade conflicts.

Wang also met with Wolfgang Schmidt of the German Chancellery in Berlin, reiterating China’s commitment to resolving the anti-subsidy case through dialogue. He expressed disappointment over the EU’s rejection of China’s proposed solutions but vowed to continue consultations.

Why It Matters: The ongoing trade tensions between China and the EU have been escalating for months. On Aug. 21, China criticized the EU’s tariffs on electric vehicle imports, calling them “unfair” and pledged to take all necessary measures to protect its EV industry. This came after the EU decided to cut duties on several major electric automakers, including Tesla Inc. An official from China's Ministry of Commerce accused the EU of fostering unfair competition, asserting that the bloc's probe into China's subsidies for its EV industry had reached “pre-determined conclusions.”

More recently, on Sep. 11, Spain’s Prime Minister Pedro Sánchez urged the EU to reconsider its stance on the tariffs for Chinese EVs, warning that escalating trade tensions could harm Spain's domestic exporters. Sánchez emphasized the need for a compromise between the EU and China before the anticipated vote in October to ratify the new tariffs. He stated, “We don’t need another war, in this case a trade war.”

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari