Why is Germany opposed to EU tariffs on Chinese electric vehicles?

Germany could be trying to stop the European Union from putting increased tariffs on Chinese electric vehicles (EVs), that are reportedly due to come into force on 4 July, or at the very least, water them down. 

The European Union has recently revealed that it could implement tariffs of up to 38.1% on Chinese EV makers. This is following an investigation launched by the EU into several manufacturers, following claims that the Chinese government had heavily subsidised them. This allowed the manufacturers to sell their vehicles at vastly reduced prices in the EU. 

Chinese EV manufacturers such as BYD, Geely and SAIC Motor are expected to be hit by the EU action.

In turn, China has already hinted at enforcing tariffs on vehicles made in the EU with large engines, which could potentially be disastrous for companies such as BMW, Mercedes-Benz and Porsche. 

German Chancellor Olaf Scholz has already highlighted that the EU’s tariffs could have long-reaching consequences, especially when it comes to jobs being created in Germany.

In a recent statement reported by Associated Press, Scholz said: “Isolation and illegal customs barriers- that ultimately just makes everything more expensive, and everyone poorer. We do not close our markets to foreign companies, because we do not want that for our companies either.” 

German manufacturers like BMW, Volkswagen and Mercedes-Benz could also be impacted in a few other ways, as they have set up massive automobile production plants in China, and benefit from Chinese subsidies and grants, such as cheaper land and relatively relaxed tax and other regulations. 

In case of any retaliatory tariffs, German automobile manufacturers could potentially see these benefits being withdrawn. Furthermore, most