Die Regierungen in Paris und Berlin wollen die Industrie vor China schützen. Zwei grossen Branchen macht das Angst.

The German governments in Paris and Berlin aim to protect their industries from competition with China. Two major sectors are causing concern. The stance of the industry is divided; automobile manufacturers hope for support. A letter to the German Chancellor is a stern warning: "The federal government must not allow the export opportunities of many parts of the industry, especially the industrial middle class, to become bargaining chips," reads the letter signed by the presidents of the VDMA (Machinery) and ZVEI (Electronics) industry associations.

NZZ.ch requires JavaScript for critical functions. Your browser or ad blocker is currently preventing this. The letter, first reported by Politico and available to the NZZ, challenges an agreement agreed upon by Friedrich Merz and French President Emmanuel Macron a few days ago. To support the ailing European auto industry, Brussels rules on exhaust emissions are to be further relaxed.

The Commission has already relaxed the rule that no new cars with internal combustion engines should be on the market by 2035 as late as the end of last year. Initially, France had rejected further relaxation. In return for the changed attitude, Germany should give up its resistance to Paris's wish: only vehicles eligible for state support like the German subsidy for electric cars should benefit from the subsidies, mostly produced in the 27 countries of the European Union.

The German government had previously argued to make these 'Buy European' rules more generous. The provisions are part of the 'Industrial Accelerator Act' presented by the EU in March. They aim to favor European manufacturers in public contracts, support programs, and subsidies. This is especially to protect domestic companies from Chinese competition, which many European politicians believe benefits excessively from state subsidies and therefore acts unfairly.

The German government had initially rejected these plans primarily because it feared countermeasures from China and also from the US, which could severely impact the export-dependent German middle class. Exactly this danger is warned against by the VDMA and ZVEI in their letter. Weakening well-established supply chains, burdening existing relationships, and provoking countermeasures from trading partners are the risks, the letter states.

The governments in Berlin and Paris risked creating "a weakening of the very industrial competitiveness they seek to strengthen." Even the automotive industry association had initially been skeptical. "The rules could provoke further trade conflicts and increase the companies' production costs," warned VDMA president Hildegard Müller in March.

Since then, however, the association seems to have changed its mind. Industry executives now clearly support state support. "Those who want to sell here must compete under comparable conditions and also create jobs and value in Europe," said VW CEO Oliver Blume a few days ago at a meeting on the sidelines of the Paris auto show.

The IG Metall trade union has long demanded that the Brussels Commission better protect the European automotive sector from Asian competition. The German Confederation of Industry, which is supposed to represent the interests of all manufacturing companies, diplomatically expresses its opinion on the current plans by Merz and Macron.

"Time-limited preferential rules can help build and secure important production capacities in Europe and reduce dependencies," says CEO Tanja Gönner. But standard European industrial policy was not enough. The EU must not upset its most important trading partners, finds Gönner, describing a delicate balance that will likely be difficult to implement.

China and the EU agreed on import restrictions for hybrid and plug-in hybrid cars on Monday. The details of the agreement were made public. The free trade world is experiencing another setback. Economy and politics must jointly respond to the Chinese competition, finds Oliver Blume. For his company, this is particularly important - because if Volkswagen loses this sales market, it could be disastrous.

China and the EU are currently negotiating in Beijing about a solution in the trade dispute. While Europeans already threaten new measures, Chinese experts still have room for compromise.