Volkswagen and BMW may be able to persuade the European Commission to lower tariffs on the electric vehicles they make in China and import into Europe.
Germany’s auto industry is the heart of its economy, accounting for a quarter of GDP. It generates more than €500 billion in annual sales, employs 800,000 people and is a symbol of soft power for the European nation.
According to anonymous sources, the commission may cut tariffs on their cars from 37.6% to 20.8% by making them “cooperating companies.” Such companies, mostly Chinese, complied with the EU investigation and were rewarded with lower rates. BMW and VW were absent from the process and were subject to the highest tariff by default.
Retaliatory tariffs imposed by the Chinese would be ruinous.
“If China slaps tariffs on European cars, the Germans will be hit hardest. They simply cannot afford to see sales tumble in China, which is now their key market,” Nick Augusteijn, an automotive journalist for Dutch newspaper NU.nl, told Lube Report.
Demand for automotive lubricants in Germany is shrinking. An increase in the number of EVs entering the market will exacerbate the decline. If those cars are made overseas, European metalworking fluid suppliers will be hard hit.