Germany Disappointed EU by Supporting China: Is EU Collapse Inevitable?

In a surprising alignment, Germany and Spain have both voiced opposition to the European Union’s proposed tariffs on Chinese electric vehicles (EVs), challenging the bloc’s central strategy for countering China’s industry. This joint stance, highlighted during Spanish Prime Minister Pedro Sánchez’s recent visit to China and supported by German Chancellor Olaf Scholz, has the potential to reshape the ongoing negotiations within the EU and could signal a shift in Europe’s approach to trade with China. The divergence reflects a complex interplay of geopolitical maneuvering and economic pragmatism, especially for two of Europe’s largest automotive economies. In 2024, the European Union (EU) has proposed new tariffs on electric vehicles (EVs) imported from China, motivated by concerns over China’s government subsidies for its domestic EV industry. These tariffs range from 17.4% to 38.1%, depending on the company and its level of cooperation with the EU investigation into alleged unfair trade practices. Tesla, which cooperated with the investigation, received a lower tariff of 9%, while Chinese firms like BYD and Geely face tariffs of up to 36.3%. The European Commission initiated these tariffs in response to the rapid growth of Chinese EV exports to Europe, which it argues that distorts competition and threatens the EU auto industry. Chinese subsidies, both direct and through benefits like low-cost land use, have allowed Chinese manufacturers to undercut European prices, leading the EU to take protective measures.