On Friday, July 12th, sources revealed that Germany will abstain from voting on the temporary tariff imposed by EU member states on electric vehicles produced in China. Previously, Germany, the largest economy in the EU, has been against increasing tariffs on China within the EU.
According to a report from Reuters on Friday, anonymous sources disclosed that EU member states began voting on the imposition of temporary tariffs on electric vehicles produced in China on Monday, July 8th. Due to an ongoing anti-subsidy investigation and negotiations between the EU Commission and Chinese authorities, Germany has stated it will abstain from voting.
By abstaining from the initial vote, it signifies support for the EU Commission to continue negotiations with Beijing on what has been the largest trade case to date for the EU.
With one-third of Germany’s automotive manufacturers’ sales coming from China, Germany had previously opposed tariff imposition, especially concerning German automotive manufacturers invested in China. Despite facing pressure from China’s cheaply dumped products, they fear retaliation from Chinese authorities in the event of a trade conflict.
As China’s protectionist stance becomes more aggressive and industrial policies stricter, competition between China and Germany intensifies, leading Germany to realize the threat posed by China, resulting in a hardening stance towards China.
In July last year, Germany released its first “China Strategy,” highlighting the global threat posed by China. Germany aims to reduce its reliance on the Chinese market in critical areas. Germany expressed alignment with the EU’s call for a strategy to “de-risk” dealings with China.
At the end of June, German Vice Chancellor Robert Habeck made his first visit to China, stating in Beijing that China’s support for Russia in the Russia-Ukraine conflict is a primary reason for the deteriorating economic relationship between Berlin and Beijing. He emphasized that Beijing’s backing of Moscow will have economic consequences.
The US has long viewed Huawei as one of the biggest national security threats during the Trump administration. Like the US and other allied countries, the German government expresses concerns about China’s unrestrained destruction and espionage activities.
To safeguard national security, the German government announced on Thursday, July 11th, that it will completely eliminate key components and technology from Chinese companies such as Huawei and ZTE from 5G networks by the end of 2029.
Starting from July 4th, the EU Commission has imposed temporary tariffs ranging from 17.4% to 38.1% on imported electric vehicles from China.
According to the EU’s basic anti-subsidy regulation procedures, temporary tariffs can be in place for up to 4 months, following which the EU Commission will decide on whether to impose formal tariffs. The deadline for the decision on the anti-subsidy investigation into Chinese electric vehicles is November 3rd.
The initial vote was conducted in writing and confidential, having no binding effect. During the temporary stage, the EU Commission holds the authority to impose tariffs entirely, although it seeks the opinions of EU member states and considers their stances.
Following the conclusion of the anti-subsidy investigation, a final vote will take place, wherein the Commission can propose final tariffs, typically lasting for 5 years.
If a sufficient number of EU member states, out of the 27, oppose these measures, they can block the implementation, requiring a unanimous refusal from 15 EU member states representing 65% of the EU population. Generally, there is no majority to prevent the implementation of such measures.