Volkswagen CEO Advocates for Tariff Adjustments

FRANKFURT (Reuters) – The CEO of German carmaker Volkswagen (ETR:VOWG_p) stated that the European Union should rethink planned tariffs on China-made electric vehicles to acknowledge investments made in Europe.

“Instead of punitive tariffs, this should be about mutually giving credit for investments. Those who invest, create jobs, and work with local companies should benefit when it comes to tariffs,” VW CEO Oliver Blume told the Sunday paper Bild am Sonntag in an interview.

Despite this, the European Union is determined to proceed with tariffs on Chinese electric vehicles, as announced by the EU executive on Friday. This decision comes in the wake of Germany’s opposition and the discontent of German carmakers, highlighting a rift over the largest trade dispute with Beijing in a decade.

The proposed duties on EVs built in China, which could reach as high as 45%, would financially burden car manufacturers, costing billions in additional expenses to import vehicles into the EU. These tariffs are expected to take effect next month and last for five years.

The European Commission, responsible for the bloc’s trade policy, initiated these tariffs as a response to perceived unfair Chinese subsidies following a year-long anti-subsidy investigation. However, it also mentioned ongoing negotiations with Beijing.

Blume expressed concern in his interview, indicating that retaliatory tariffs from China could adversely impact European car manufacturers.