German Minister Wissing: Tariffs on Chinese cars ‘wrong approach’

Putting up tariffs on Chinese electric cars to protect the European industry would be the wrong approach to promoting international competition, German liberal Transport Minister Volker Wissing told Euractiv in an interview.

Read the full interview in the original German here.

The European Commission is investigating China’s electric vehicles, which EU Commission President Ursula von der Leyen says are sold at “artificially low” prices on European markets.

The investigation, the results of which are due to be presented shortly, could lead to new import duties on electric cars from China if firms are found to have received an excessive amount of subsidies from the state. The US administration hiked tariffs from 25% to 100% earlier this month.

“Global competition is an incentive for German manufacturers to build better and cheaper cars,” Wissing told Euractiv. “I’m not worried that the German vehicle industry won’t survive this competition.”

Wissing said he was “puzzled that some people are now calling for competition to be restricted by the state,” adding that “this has absolutely nothing to do with a market economy.”

“In the end, you have to ask yourself: do we want to steer such a major transformation process according to the blueprint of the economically defunct GDR [German Democratic Republic], or do we stick with the successful model of the Federal Republic of Germany?”

Notably, France has taken a more hawkish approach to the Chinese competition, with the national subsidy scheme for electric cars already excluding Chinese manufacturers on the grounds of environmental criteria.

In contrast, German carmakers and politicians are much more concerned about potential Chinese retaliation, which could isolate the country’s flagship industry from the world’s largest car market.

Asked specifically about the EU investigation, Wissing said, “The approach must always be to create fair competition instead of working to hinder it. That’s why the fundamental approach is wrong.”

“I miss a reliable study by the EU Commission that shows where competition is unfair. On this basis, the matter could be addressed. But simply saying that we have a suspicion is not enough,” he added.

Keeping the internal combustion engine alive

Wissing became known across Europe in early 2023 when he temporarily blocked the adoption of the EU’s de facto ban on new internal combustion engine cars as of 2035. He lifted his veto only after an exemption was included for cars running on climate-neutral synthetic fuels, known as e-fuels.

In the next EU five-year term, “we need to become more open to technology because too many questions remain unanswered,” he said.

His party, liberal FDP, is a staunch proponent of not ruling out any technology. In contrast, many environmentalists stress that battery-electric cars and trucks are more energy efficient and should be preferred over other technologies, such as e-fuels or hydrogen, wherever possible.

“Some people who are particularly vocal about climate protection and want to electrify everything are misleading people about what they actually want,” Wissing said.

“They want a large share of transport – both passenger and freight transport – to cease altogether. They know full well that this will cause the economy to shrink.”

While the implementation of the exemption for ‘e-fuel only’ cars is still outstanding, Wissing also refuted criticism by German opposition parties CDU/CSU (EPP), who blamed the minister for not living up to his “technological openness” principles.

CDU and CSU are “playing a false game,” he said, adding that “in Europe, they have driven the phase-out of combustion engines.”

German CDU, the party of Commission President Ursula von der Leyen, launched a campaign last week to stop the “combustion engine ban”, which Wissing said was a pure campaign move.

The new category for ‘e-fuel only’ cars had not been implemented because “the German industry in particular says that it still needs some time to define the technical requirements”, Wissing said.

“By the end of the year, there should be a proposal for technical implementation to ensure that vehicles newly registered from 2035 onwards can only run on e-fuels and not on conventional fuels,” he added.

Leave it to the market

CDU/CSU and FDP want to reach climate targets primarily through emissions trading which puts a price on carbon emissions by establishing a market with a fixed amount of emission certificates.

However, the carbon price should also not “overburden anyone”, Wissing said.

The EU is set to introduce an emissions trading scheme for road transport and buildings as of 2027, which some experts believe could lead to carbon prices of up to €200-300, meaning a hike in petrol and diesel prices of around 50 to 80 cents per litre.

Wissing refused to “take part in such speculation because it unsettles people”, adding that “nobody can predict how energy prices will develop”.

“Speculation about how the price will develop distracts from the fundamental question: should the state dictate where CO2 should be saved first, or should this be left to the creativity of the many?” he said.

“If you don’t know something, it’s better to hold back on regulation and let the market take its course,” Wissing said.

[Edited by Donagh Cagney/Anna Brunetti/Alice Taylor]