German industrial firms show preference for imposing fines on imported Chinese electric cars.
Nearly 80% of German companies within the industrial sector believe that tariffs on Chinese electric vehicles are either "justified" or "partially justified", according to a report by "Handelsblatt". This assessment was made after the Institute of the German Economy Cologne (IW) surveyed about 800 companies. The survey was conducted in order to gather opinions on the ongoing investigation by the European Union Commission on potential unfair subsidizing of electric cars from China.
The EU Commission is expected to announce their findings and make a decision about the tariffs this week, following a similar move by the US. Fears have been raised by top managers at BMW, Mercedes, and Volkswagen over the possibility of imposing tariffs on Chinese cars. These German automakers are known to generate a significant portion of their profits in China, with estimates putting it around 20 to 23%. The majority of the imported Chinese cars into the EU are, in fact, from European manufacturers. The skepticism towards the proposed tariffs also extends to German Chancellor, Olaf Scholz, belonging to the Social Democratic Party (SPD).
Low pricing from Chinese competitors appears to be a widespread issue beyond just the automotive industry. Around 80% of the around 350 German companies with Chinese competitors stated that they are being undercut on like-for-like products. This is further confirmed by more than a third of these firms, who report that their Chinese counterparts are offering their products at prices more than 30% cheaper than their own.
China has expressed some displeasure with the anti-subsidy investigation and has urged cooperation, as well as engaging in lobbying efforts with individual EU countries. The EU on the other hand, has opted to remain tight-lipped on how they plan to deal with the potential tariffs.
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- In response to the EU Commission's investigation, German industrial companies, including those in the automotive sector like BMW, Mercedes, and Volkswagen, have expressed concerns about the potential implementation of punitive tariffs on imported Chinese electric cars, as these tariffs could significantly impact their profits derived from the Chinese market.
- The recently conducted IW survey revealed that a majority of German industrial companies, roughly 80%, support the imposition of either fully or partially justifiable tariffs on Chinese electric cars due to concerns about unfair subsidies.
- As a result of the increased competition from Chinese industrial companies, especially in the production of electric cars, a significant number of German firms have reported facing lower pricing pressures, with Chinese competitors offering their products at prices that are up to 30% lower than the German counterparts.
