On October 30, 2024, the European Union announced an increase in tariffs on electric car imports by up to 35.3%. In response, China expressed strong disapproval, stating through a spokesperson from its Ministry of Commerce that it does not accept the decision.
The spokesperson emphasized that China would take all necessary measures to protect the legitimate rights and interests of its companies and confirmed that a complaint had already been filed with the World Trade Organization (WTO).
This tariff implementation has significantly raised the cost of importing electric vehicles from German manufacturers, including the BMW electric Mini and the Cupra Tavascan from the struggling Volkswagen Group. Volkswagen recently reported a dramatic 63.7% drop in profits for the third quarter of 2024, citing a challenging market environment that necessitates substantial cost reductions and efficiency improvements.
The EU Commission, led by President Ursula von der Leyen, pushed through the tariff decision despite opposition from the German government, and it is set to remain in effect for five years. This poses a significant challenge for the German automotive industry, which fears potential retaliatory measures from China.
While China has currently only imposed tariffs on EU brandy, discussions are underway regarding tariffs on European pork and dairy products, and potentially German cars in the future. Exports of German cars to China have already seen a decline, with approximately 216,300 vehicles exported last year, a 15% decrease from the previous year. Higher tariffs could further deter Chinese consumers from purchasing these vehicles.