BERLIN – German carmakers are “afraid” they could be hit by retaliation if the EU imposes tariffs on Chinese electric vehicles as a result of a new anti-subsidy investigation, German Economics Minister Robert Habeck warned.
In strikingly candid comments during a panel discussion in Berlin on Friday, Habeck also acknowledged that there is a Franco-German divide over the anti-subsidy investigation announced by EU Commission President Ursula von der Leyen earlier this month that has raised fears of a trade war with Beijing .
Habeck said that France, which had pushed hard for such an EU investigation into Chinese electric vehicles, sells far fewer cars in China than German automakers and therefore has less to lose in a possible escalation with Beijing over auto tariffs.
“German cars are sold well in China,” said the German economics minister said at the Atlantic Council Transatlantic Forum for Geoeconomics. “Now Ursula von der Leyen suggested that we should look deeply into the question of whether China is making illegal donations or not, whether this is the responsibility of the WTO.”[compatible] “Subsidies” for electric car manufacturers, he said.
Habeck added: “The German automotive industry is rightly afraid” that if the Commission were to find evidence of such illegal state aid and then impose anti-subsidy tariffs on Chinese electric vehicles, “we would have to fear countermeasures.”
He argued that “this is not a problem for France because they don’t sell so many cars” in the Chinese market, which is why Berlin and Paris are assessing “from different perspectives” the impact and consequences of an EU anti-subsidy measure probe.
“It’s very, very difficult to bring all these different views together,” Habeck said.
Previously, German industry representatives, speaking on condition of anonymity, highlighted the different interests between Berlin and Paris in the subsidy investigation and even claimed that French car manufacturers saw this as an opportunity to harm their German competitors. But Habeck’s comments are the first time a high-ranking German official has openly acknowledged such a rift.
Chancellor Olaf Scholz’s top adviser on EU, economic and financial policy, Jörg Kukies, said at the same Atlantic Council event earlier Friday that the EU’s anti-subsidy investigation into Chinese cars was “completely normal” and “completely legitimate.” Nevertheless, Kukies emphasized that such an investigation must meet “very high standards”.
“So you can’t just say them [the Chinese] “We do this and that and that’s why we impose trade-related measures,” Kukies said, adding that “the threshold of evidence is very high.”