Volkswagen CEO calls for EU to rethink tariffs on Chinese electric vehicles

Tariff tension: The head of Volkswagen appealed to the European Union on Thursday to rethink its planned tariffs on electric vehicles from China, saying investment in Europe should be rewarded rather than punished. That was emphasised by Blume in an interview for the Bild am Sonntag, speaking of the call to make investments made in Europe credit-worthy: "Those who invest, create jobs, and work with local companies should benefit when it comes to tariffs."

Starting next month, Brussels plans to impose tariffs of as high as 45 per cent on electric vehicles made in China. The move has triggered widespread outrage, particularly from Germany's automakers, the EU's largest economy. Several of them, including the largest automobile manufacturer, Volkswagen, have expressed opposition to the tariffs and claimed that they may aggravate hostilities between Brussels and China and prompt retaliatory measures in turn that can further damage European carmakers.

The European Commission has described the levies as retaliation against what it feels to be unfair subsidies by China based on a 12-month investigation. However, Blume noted the punitive measures could trigger a trade war that hurts both parties and urged the union to maintain its dialogue with Beijing. On the other hand, he added, the levies could significantly raise costs for car producers interested in selling vehicles into the EU market and thus erode their competitiveness.

Against this backdrop, the divergence between the EU Commission and Germany offers interesting insights into how complex international trade relations are managed, particularly in this fast-growing EV industry. Meanwhile, with Brussels and Beijing holding talks, one can't confidently predict what's on the cards with regards to the proposed tariffs.