BERLIN, July 4 — German auto giant Volkswagen today said EU moves to impose provisional extra duties of up to 38 per cent on Chinese electric car imports over subsidy concerns were “detrimental” to the European market.

“Countervailing duties are generally not suitable for strengthening the competitiveness of the European automotive industry in the long term — we reject them,” Volkswagen said in a statement.

Brussels announced the planned tariff hike last month at the conclusion of an investigation into Chinese state subsidies for electric vehicle makers potentially undercutting European manufacturers.

But auto groups in Germany responded negatively to the EU action against China, where many of them have significant business interests.

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“The timing of the EU Commission’s decision is detrimental” to the European electric car market, where demand was weak, Volkswagen said.

Europe’s largest carmaker said the “negative effects of this decision outweigh any potential benefits for the European and especially the German automotive industry”.

BMW chief Oliver Zipse said the tariff battle between the EU and China “leads to a dead end”.

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“It does not strengthen the competitiveness of European manufacturers. On the contrary: it harms the business model of globally active companies,” Zipse said in a statement.

The move to increase the price of Chinese imports also “limits the supply of electric cars to European customers and can therefore even slow down decarbonisation in the transport sector”, Zipse said.

The provisional duties on Chinese manufacturers included a 17.4 per cent tax for market major BYD, which has recently turned its attention to the European market, as well as a 19.9 per cent mark up for Geely and 37.6 per cent for SAIC.

The increase will kick in from tomorrow, with definitive duties to take effect in November for a period of five years, pending a vote by the EU’s 27 member states.

Germany’s VDA auto industry association said there was a “real risk of escalation in the trade conflict with China” if the EU pushed ahead with the tariff rises.

“Chinese countermeasures could severely hit the European economy”, especially sectors with large exports to China, the VDA said.

The industry association called on the EU to cancel the tariff increases and find a “negotiated solution” with Beijing. — AFP