German Manager Magazine: Tariffs: EU shows BMW and VW concessions in the trade dispute003437

The car manufacturers Volkswagen and BMW According to insiders, they can expect concessions from the EU Commission regarding import duties for their vehicles China hope. There is obviously movement in the classification of the models from the Volkswagen subsidiary Cupra and the BMW Mini, which are imported from China, company circles said on Tuesday.

The EU Commission is ready to decide that the two German manufacturers should be classified as so-called cooperating companies in this case. A provisional tariff rate of 20.8 percent applies to this group, while it is 37.6 percent for non-cooperating companies.

Decision pending

The EU Commission has signaled its willingness to accommodate, said a second person familiar with the process. However, details are still open and a decision is still pending. A spokesman for the EU Commission said the Commission was examining a number of requests from companies that had not yet produced electric cars during the investigation period.

A decision will be made when the final tariffs are decided. “The parties involved will be informed of the Commission’s proposal and will have the opportunity to comment before final measures are published.”

The Spanish VW subsidiary Cupra imports the electric SUV Tavascan from China, BMW has two electric mini models in a joint venture with the Chinese manufacturer Great Wall  

produce for the world market.

Only on the market in Europe for a few weeks

The affected vehicle models have been in production since the end of 2023 and have only been on the European market for a few weeks. The vehicles were therefore not taken into account in the EU Commission’s investigation. So far the anti-Dumping duties on electric cars from China only imposed provisionally. The EU Commission has until November to make its final decision. VW declined to comment. BMW did not initially respond to a request for comment.

In Germany, the EU Commission’s preliminary punitive tariffs caused concern because there are fears of retaliatory measures that could particularly affect German car manufacturers. China is the largest car market in the world and, according to the Association of the Automotive Industry (VDA), was the third largest export market for cars from Germany in 2023 – after the USA and the United Kingdom. German companies could not only be affected by countermeasures, but also by the EU measures themselves – because some of them produce in China for export.

The Association of the Automotive Industry (VDA) recently said that if China were to introduce import duties on vehicles with engines with a displacement of more than 2.5 liters, this would hit the industry hard. In 2023, around a third of the vehicles exported from Germany to China would be of this size.

Federal Economics Minister Robert Habeck (54; Greens) is also pushing for a political solution by November. He recently emphasized that Germany has no interest in “the fact that there is a race between tariffs and that the markets are fragmented as a result.”

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