VDA President Hildegard Müller on EU Countervailing Duties:

“Today the European Commission announced the application of provisional countervailing duties on imports of electric vehicles from China. The countervailing duties of up to 37.6% will be introduced from July 5. However, the final decision on the firm determination will not be made until the beginning of November. Until then, importers must provide guarantees in the amount of the duties that may be incurred.

In order to stop this move away from global cooperation and free and fair trade, both China and the EU Commission must do everything in their power to find a solution through open and constructive dialogue. A possible global trade conflict must be averted. In recent days, both sides have signaled their willingness to talk and are in intensive exchange. We strongly support this approach and appeal to both sides to bring the negotiations to a successful conclusion.The VDA key points paper on the European Commission's anti-subsidy investigation can be found here.

In principle, countervailing duties on electric cars imported from China are not suitable for strengthening the competitiveness of the European automotive industry. The German automotive industry is committed to free and fair trade. Any protectionist measure, including additional tariffs as well as unjustified and market-distorting subsidies, restricts free trade and carries the risk of trade conflicts that ultimately work to the detriment of all sides. There is no doubt that the results of the anti-subsidy investigation show that the extent and nature of government support in China is a challenge. However, the potential damage that could result from the countervailing duties now provisionally imposed is likely to outweigh the potential benefit of increasing market isolation for the European - and especially the German - automotive industry.

It is also a fact that global problems can only be solved with China. This is especially true for successfully tackling the climate crisis. China plays a crucial role in a successful transformation towards electromobility and digitalization - a trade conflict would also endanger this transformation.

Overall, the countervailing duties now provisionally imposed by the EU will not solve the challenges facing the European and German automotive industry. On the contrary, the purpose of countervailing duties intended by the EU Commission would quickly have a negative impact in the event of a trade conflict. Instead, the focus must finally be also on Europe as an industrial location. Locational attractiveness and competitiveness are the best prerequisites for a successful transformation and for a leading position in international competition. Therefore, an active industrial strategy is imperative, including an active trade policy. An approach is needed that promotes the strengths of our industrial nation, develops the location to be internationally competitive, opens up new markets, focuses on innovation and thus secures prosperity and growth as well as a confident role on the world stage.”

The VDA key points paper on the European Commission's anti-subsidy investigation can be found here.