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German carmakers fear China retaliation

German carmakers fear China retaliation

Germany’s economy minister has issued a warning that German car manufacturers are apprehensive about potential retaliation from China.

German car manufacturers are expressing significant concerns about the possibility of facing retaliatory measures if the European Union were to impose tariffs on Chinese electric vehicles as a result of a newly initiated anti-subsidy inquiry.

German Economy Minister Robert Habeck issued these candid remarks during a panel discussion in Berlin on Friday.

Furthermore, Habeck acknowledged a noticeable division between France and Germany regarding the anti-subsidy investigation. European Commission President Ursula von der Leyen recently announced this investigation, raising concerns about a potential trade conflict with Beijing. Habeck pointed out that France, which strongly advocated for this EU probe into Chinese electric vehicles, sells significantly fewer cars in China compared to German automakers. Consequently, France has less at stake in a potential escalation of car tariffs with Beijing.

Prior to this, anonymous German industry officials had underscored the differing priorities between Berlin and Paris concerning the subsidy inquiry, even suggesting that French automakers saw it as an opportunity to undermine their German rivals.

However, Habeck’s comments mark the first instance of a senior German official openly acknowledging this divergence.

At the same event on Friday, Jörg Kukies, the top adviser to German Chancellor Olaf Scholz on EU, economic, and financial matters, asserted that the European Union’s anti-subsidy investigation against Chinese automobiles was entirely customary and entirely justified.


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