BRUSSELS (dpa-AFX) - Shortly before the expected entry into force of provisional EU punitive tariffs on Chinese e-cars, the German Association of the Automotive Industry (VDA) has vehemently warned of the consequences for the domestic economy. The punitive tariffs are not expedient for either the EU or Germany, according to a key issues paper submitted to the German Press Agency.

The association warns of the "enormous" damage that could be caused by potential countermeasures from Beijing. China is the largest car market in the world and, according to the VDA, was the third largest export market for cars from Germany in 2023 - after the USA and the United Kingdom.

Warning of Chinese tariffs

Should import duties be introduced from Beijing on vehicles with an engine of more than 2.5 liters, this would hit the industry hard, according to the lobby association. In 2023, around a third of vehicles exported from Germany to China would fall into this size category.

In addition, high taxes would not achieve the declared goal of ensuring fair competitive conditions and protecting the domestic industry from unfair practices. On the contrary: they would make the expansion of electromobility and thus the achievement of climate targets more difficult, the association emphasizes.

Security deposit as a penalty

The EU Commission is expected to publish the necessary details on Thursday so that the provisional duties can come into force. If this is the case, they will be levied from July 5 at midnight by means of a security deposit. Whether the duties of up to 38.1 percent will actually be withheld, however, depends on whether another solution can be found with China.

The EU states must decide by November at the latest whether duties will also be introduced in the long term. In this case, the provisional duties would then be levied retroactively in certain cases.

The decision to threaten punitive tariffs was accompanied by an investigation by the EU authorities, which came to the conclusion that Chinese e-car producers were benefiting from unfair subsidies. Manufacturers in the EU were threatened with damage as a result.

VDA: No flood of e-cars expected from China

Meanwhile, the German automotive industry does not expect Chinese e-cars to flood the European market. The association estimates that their share of the overall passenger car market should settle at around five to ten percent by 2030. This is also due to consumer brand loyalty, which is very pronounced when it comes to cars. By way of comparison, the VDA states that in 2023, German manufacturers will have sold around ten times as many e-cars in China as Chinese producers in Germany./scr/DP/zb