“We need the Chinese market to stay open, so we want the European market to stay open too,” he said.
Germany, which is expected to be hardest hit by any retaliatory measures from Beijing, is already lobbying strongly against the tariffs.
“The industry has also been very clear that tariffs as proposed by the EU will not make the automotive industry more competitive. […] Instead of trying to protect the car industry, he argues for investing in strengthening the EU’s competitiveness. [with tariffs]” , Butek said.
The new tariffs are likely to spark fierce negotiations between China and the EU, with China vowing to retaliate, and the EU having to decide by November whether to make the tariffs permanent.
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02:03
Chinese electric cars face additional import tariffs of up to 38% from the EU
Chinese electric cars face additional import tariffs of up to 38% from the EU
German Vice Chancellor and Minister for Economic Affairs and Climate Action Robert Harbeck is due to begin a two-day visit to China on Thursday, with negotiations on EV tariffs high on his agenda.
“We are hopeful that China and the European Union can find a very fair way forward through negotiations” before the November deadline, Butek said.
“The market share of Chinese-made EVs in the European Union is still very small, so I think there is plenty of room for negotiation rather than pushing for higher tariffs,” he said.
He added that German carmakers with a presence in China do not see the “unfair government subsidies” that were the basis of the EU’s decision as a major business challenge.
But he said the German government should continue to promote fair competition for German companies operating in China, as Chinese companies are already seen as technology leaders, particularly in the automotive industry.
“German businesses need action from policymakers to establish a level playing field in China and provide a transparent regulatory environment,” said Klas Neumann, president of the East China German Chamber of Commerce.
The chamber also released the results of its latest business survey, conducted in May, on Friday, which showed that German companies operating in China are raising their sales outlook but optimism about the Chinese economy is struggling to recover.
According to the survey of 186 member companies, price pressures are the biggest challenge facing German companies this year, particularly in the automotive and machinery industries.
“We’re seeing more and more local competitors that are comparable to us,” Newman said, “so there’s a lot of pricing pressure in the market right now as the number of competitors increases and as the volume of their products increases.”
He added that the competition is intensifying due to sluggish demand both at home and abroad.
China’s auto industry has been locked in a price war over the past two years as electric vehicle makers continue to intensify their competition to gain a bigger share of the world’s largest auto market.
03:11
Cheap EV alternative to Tesla and BYD takes off in China’s small towns
Cheap EV alternative to Tesla and BYD takes off in China’s small towns
The survey found that three-quarters of German companies reported overcapacity in their industries in China, with around half of them saying the overcapacity had started to appear in the last year and 96 percent saying it was affecting their business.
The business outlook also appears to be improving slightly, with 38% of respondents expecting conditions in their industry to worsen compared to 2023, down significantly from 52% in September.
Additionally, 29% of respondents expect the industry outlook to improve compared to 2023, a slight increase of 8 percentage points from September.
Meanwhile, 39% of businesses expect their sales to increase in 2024 compared to last year, up from 13% in September last year.
Still, only 53% of respondents said they plan to invest more in China over the next two years, down from 61% in September, while 16% said they plan to invest less.
