Germany launches 11th-hour bid to avert trade war with China – POLITICO
“As long as individual member states are kind of played off each other like that, that is very much in Beijing’s interest and suits their interests more than European interest writ large,” Jacob Gunter, a lead analyst at China-focused think tank MERICS, said.
China has already warned it would target the EU’s agriculture and aviation sectors — two sensitive industries that France would be eager to shield. Should Beijing hit back, it wouldn’t be good news domestically for Macron, whose centrist alliance was obliterated by a resurgent far right in the European election.
Berlin may well be trying to avoid exactly that kind of tough retaliation. But its push for a mirroring tariff “undermines the legitimacy of the entire endeavor,” warned Niclas Poitiers, economist at Brussels-based think tank Bruegel.
Germany’s position was “problematic,” he said: While big German automakers still entertain good ties with Beijing, that’s not necessarily the case for smaller businesses, meaning “the German economy as a whole has an interest in a more assertive policy towards China.”
Over the past decade, BMW, Audi and Mercedes-Benz have sold 19.2 million cars in China, making up 30 to 40 percent of each automaker’s global sales, according to data from Schmidt Automotive Research.
Yet even the highest rumored duty — 25 percent — would not be enough to deter Chinese brands thanks to their huge cost and technology advantages. Chinese EV sales into Europe grew by 23 percent, to nearly 120,000 units, in the first four months of this year.
“They can lower their prices and continue to be competitive. We’ve seen that happen in France already,” Matthias Schmidt, a European auto analyst, said.
Camille Gijs, Jordyn Dahl, Antonia Zimmermann and Jakob Hanke reported from Brussels. Hans von der Burchard reported from Berlin. Koen Verhelst and Stuart Lau contributed reporting from Brussels.
