German chancellor warns against trade war as EU tariffs loom

Industry News | | MIC Customs Solutions |

With the EU set to announce new tariffs on Chinese EV imports, German chancellor Olaf Scholz has spoken out against new trade barriers.

German chancellor Olaf Scholz has warned against the introduction of new trade barriers as it was reported that the EU is set to announce higher tariffs on imports of electric vehicles (EVs) from China as early as this week.

Brussels is poised to unveil the exact level of additional duties following an investigation into alleged unfair subsidies offered to Chinese carmakers by Beijing, which have helped the country's auto manufacturing sector greatly increase its imports to Europe in recent years at the expense of EU competitors.

The moves come shortly after the US government announced a quadrupling of tariffs on Chinese EVs from 25 to 100 percent.

However, Mr Scholz has said that "free and fair" trade has helped Germany's automakers benefit from business in China, which would be threatened if the expected tariffs are to go ahead.

"Isolation and illegal custom barriers ... ultimately just makes everything more expensive and everyone poorer," he stated at an event organized by Stellantis. "We do not close our markets to foreign companies because we do not want that for our companies either."

Germany's automotive sector has opposed the tariffs, raising concerns about the potential for retaliatory measures from Beijing that would harm their own exports. Earlier this month, former VW chief executive Herbert Diess said trade with China secures jobs in Europe and new tariffs would fuel inflation and delay the transition to a greener economy.

However, automakers are already preparing for the imposition of tariffs, with it reported by the Times this week that Volvo is set to move manufacturing of EVs back from China to Belgium in order to avoid new levies.