Germany lobbies fellow EU members to vote against tariffs on Chinese EVs #NewsGerman

Spanish State Secretary of Commerce Amparo Lopez Senovilla signs an agreement with Chinese Minister of Commerce Wang Wentao in Beijing on September 9. Photo: EPA-EFE alt=Spanish State Secretary of Commerce Amparo Lopez Senovilla signs an agreement with Chinese Minister of Commerce Wang Wentao in Beijing on September 9. Photo: EPA-EFE>

Last week, Spanish Prime Minister Pedro Sanchez implied that Madrid would flip from a vote in favour of duties to a vote against.

This came after Beijing launched an anti-dumping probe into EU pork imports, a large share of which come from Spain. At the same time, Sanchez was promised large-scale industrial investment during a meeting with Chinese President Xi Jinping.

Among them, the Chinese hydrogen electrolyser manufacturer Envision will build a US$1 billion plant in Spain.

“I have to be blunt and frank with you that we need to reconsider – all of us, not only member states but also the [European] Commission,” Sanchez said during a visit to Kunshan in eastern China.

“We don’t need another war, in this case a trade war,” Sanchez said when asked about how Spain planned to vote.

German Chancellor Olaf Scholz expressed support for Sanchez’s position, saying via his spokesman Steffen Hebestreit that this “direction of travel is one that we share”.

Germany abstained in July’s vote after its divided coalition government could not land on a common position. But Scholz’s stance has led to increased lobbying that has been called “unhelpful” by Brussels sources.

It is a high-stakes gambit from Scholz, whose government has split on whether to take a firmer stance against what Brussels describes as market-distorting behaviour in China’s industrial powerhouse.

Spanish Prime Minister Pedro Sanchez and Chinese leader Xi Jinping meet at Diaoyutai State Guesthouse in Beijing on September 9. Photo: Handout via Reuters alt=Spanish Prime Minister Pedro Sanchez and Chinese leader Xi Jinping meet at Diaoyutai State Guesthouse in Beijing on September 9. Photo: Handout via Reuters>

Success from Berlin’s perspective would undermine European Commission President Ursula von der Leyen’s de-risking efforts during her second term, even before she puts her senior leadership team together.

Von der Leyen, a German, is set to introduce her proposed college of commissioners on Tuesday. She has vowed to strengthen trade defences against China, arguing that the bloc needs to decrease critical dependencies and bolster its own industrial competition.

“If Scholz is successful in stopping the duties, it may offer some short-term relief for German carmakers who won’t have to worry about Chinese retaliation,” said Noah Barkin, an analyst of EU-China relations at the Rhodium Group.

“But the scars for Europe, in terms of damage to the Franco-German relationship, to the bloc’s leverage with China and to its credibility with G7 allies, would be deep and long-lasting,” he added, referring to Paris’ long-standing support for the measures.

In the meantime, Beijing has been making its own efforts to tip the balance in its favour.

On Sunday, Wang met Robert Vavasorri, chair of the Italian Association of the Automotive Industry, to discuss “the EU’s anti-subsidy case against China’s electric vehicles”, according to a statement on the ministry’s website.

If Italy were to follow Spain and, potentially, Germany in voting against the tariffs, Brussels will have a scrap on its hands since several big states flipping could give smaller countries cover to follow suit.

Commerce minister Wang Wentao has been in Europe discussing the high-profile trade dispute with senior figures in influential governments. Photo: File alt=Commerce minister Wang Wentao has been in Europe discussing the high-profile trade dispute with senior figures in influential governments. Photo: File>

Over the weekend, meanwhile, a Chinese industrial group said it had coordinated with car companies to offer a new proposal to the commission, which would make fresh commitments around a price floor for the imports, which the commission says are undercutting local competitors.

“China Chamber of Commerce of Machinery and Electrical Equipment has … coordinated companies to submit a perfected price commitment plan to the European Commission, which further considered its concerns,” read a post on the chamber’s WeChat account.

“The deadline for submitting such offers was the 24th of August. There’s no possibility beyond that deadline to offer new price undertakings under the rules for this type of investigation,” EU trade spokesman Olof Gill said, adding that the “Chinese automakers in question have had many weeks before the deadline” to make the offer.

He said the previous proposals had been received on the very last day of the period in which such an undertaking was possible.

“Had it happened at an earlier stage that would have allowed for meaningful engagement on the topic,” Gill said.

“However, the fact of the matter is that all the offers received, all of them were received on the very final day the deadline itself … all the commission could do was thoroughly review them.”

Insiders believe Beijing may be trying to pressure the commission by making offers that are not legally acceptable under EU trade rules.

Several capitals have voiced their hope of a negotiated solution, and the optics of Brussels rejecting a series of proposals from the Chinese side may seem as though it is being unreasonable, various sources implied.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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