How Germany lost the battle to prevent tariffs on Chinese cars

By Hans von der Burchard, Julia Wacket | 05/23/2024 06:44 AM EDT

The die was already cast when Ursula von der Leyen announced an EU probe into market-distorting subsidies for Chinese electric vehicles last fall.

BERLIN — Despite all the warnings about protectionism and a looming trade war, Chancellor Olaf Scholz and top German officials have realized that they can’t stop the EU from slapping tariffs on Chinese electric cars.

Last fall, European Commission President Ursula von der Leyen announced a probe into market-distorting subsidies for Chinese electric vehicles, marking a significant hardening of the EU’s trade policy toward Beijing. Eight months later, there is little doubt left in Brussels and Berlin that sufficient evidence for such unfair state aid has been found.

The Commission is expected to impose preliminary anti-subsidy duties on Chinese EVs by early July, but rules require the EU to already communicate such a decision to carmakers — and other parties like EU importers of Chinese cars — four weeks in advance, meaning that the announcement of the upcoming tariffs is expected to land in about two weeks.


Scholz’s government — driven by fears of Chinese retaliation — has warned repeatedly against imposing the tariffs, which the chancellor has described as “protectionist.” Earlier this month, Economy Minister Robert Habeck said that “the German automotive industry in particular is very worried about this, because it is to be expected that the Chinese will then impose tariffs on German imports.”