EU Urged to Follow US in Imposing Tariffs on Chinese Electric Vehicles

The United States has imposed punitive tariffs on Chinese electric vehicles (EVs). Should the EU follow suit? SPD politician Nils Schmid thinks so. He does not share the concerns of German car manufacturers.

The US President, Joe Biden, has implemented 100 percent tariffs on Chinese electric vehicles as part of the ongoing trade dispute with Beijing. The European Union is also considering how to respond to the alleged influx of Chinese EVs, with the European Commission, led by Ursula von der Leyen, potentially announcing its own tariffs before the upcoming EU elections. The German automotive industry is wary, fearing Chinese retaliation. However, SPD foreign policy expert and former Baden-Württemberg Minister of Economic Affairs, Nils Schmid, advocates for a “robust” stance against China.

Mr Schmid, only a few tens of thousands of Chinese-made electric cars were registered in Germany last year. Can we really talk about a flood?

There is much to suggest that China is deliberately creating large overcapacities in EV production to conquer foreign markets with cut-throat prices. It is therefore crucial that we push for fair competition conditions now.

The Chinese government denies subsidising its car manufacturers. It claims that Chinese EVs are simply good and affordable, which is why they are so successful.

The EU has clear procedures to determine the extent to which Chinese EVs are artificially cheapened through unfair state subsidies. I am confident that we will have results soon. However, German car manufacturers also need to ask themselves how they can offer affordable EVs for the middle class. Given the model offensive by German manufacturers, I am optimistic that they will succeed.

Do we not have to admit that we relied too long on combustion engines, while China strategically built an EV industry, including battery production and supply chains?

That is water under the bridge. German manufacturers will not be able to offer low-priced EVs quickly. What matters now is that they bring a wide range of models to the market, not just luxury ones. And that competition from Chinese manufacturers is not distorted by state subsidies.

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