Germany calls for tougher EU stance on China

On Thursday, German Finance Minister Lars Klingbeil urged the European Union to adopt a tougher stance against China's "unfair trade practices" to shield the country's beleaguered car manufacturers. During a visit to Volkswagen's headquarters in Wolfsburg, the heart of the company's production operations, Klingbeil emphasized Germany's commitment to pushing for a stronger EU response.

Klingbeil, after discussions with staff representatives and local politicians, stated that Germany could no longer afford to be naive in its dealings with China. He stressed the need for a clear signal at a European level to counteract the growing Chinese competition. The crisis within the German auto industry is a result of intensified Chinese competition, coupled with weak domestic demand and US tariffs.

Major carmakers, including Volkswagen, Mercedes-Benz, and BMW, have responded by downsizing their workforce as a result.

In addressing these challenges, Berlin plans to press for "concrete measures" from Brussels, the EU body responsible for trade policies. Klingbeil advocated for stricter regulations in areas like plug-in hybrids and local content requirements. He reiterated his support for standing up against unfair trade practices, emphasizing that Germany must exude greater self-confidence and adopt a more robust approach toward countries posing a threat to its industries.

Since 2024, the EU has imposed higher tariffs on Chinese-made electric vehicles, alleging that they benefit from unfair state subsidies. There has been a growing demand to extend these levies to hybrid vehicles, which incorporate both electric motors and internal combustion engines. Speaking alongside Klingbeil, Daniela Cavallo, a VW staff representative and member of its supervisory board, echoed the call for Chinese-made hybrids to face higher tariffs.

Cavallo highlighted the "enormously tough, difficult and unfair competition" faced by German manufacturers.