VW CEO advocates for investment-based tariff adjustments for Chinese automakers

Volkswagen CEO Oliver Blume called on the European Union to rethink a policy of levying tariffs on electric vehicles (EVs) imported from China. In an interview with Bild am Sonntag, Blume suggested that when the EU grants tariff exemptions to the Chinese manufacturers who invest in local operations, who create jobs and work with European companies, then the rest of the world would have to take notice.

Instead of punitive tarrifs, Blume says, this should be about mutual credit for investment. "Lower tariffs should be enjoyed by those who invest in Europe."

This comes after the European Commission last week revealed its plans for tariffs of up to 45%, on Chinese-made electric vehicles. The Commission's move is a response to a year-long anti-subsidy investigation that it argues the Chinese government is using to provide unfair subsidies. The tariffs are due to begin next month and run for five years, a cost that manufacturers anticipate will be in the billions as they attempt to import vehicles into the EU.

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The decision has unsettled Europeans as well, most especially European automakers, who have one foot in Ontario. Volkswagen and other German carmakers have opposed the tariffs, fearing it would set off a new round of trade tensions with China and in turn the country’s retaliation. The reprisals could also harm European automotive manufacturers, Blume warned.

While the EU still stands by its trade policies, officials have said they are willing to talk to Beijing about continuing such talks. Indeed this rift is a deeper one than its reflection in the contrasting views between EU policymakers and major German automotive firms over how to handle the bloc's most significant trade conflict with China in a decade.

In order to keep up with developments in the rapidly evolving EV market, Blume’s cry for an investment based tariff system reflects the precarious calculations between national concerns and global interplay in the EU’s misty path.