EU car tariff tensions rise as Volkswagen challenges EU strategy

An increasing number of manufacturers are beginning to publicly question the legitimacy of the European Union's alleged plans to raise tariffs on Chinese cars. Volkswagen has joined the discussion, proposing an alternative strategy.

Although the topic of the Chinese automotive industry and its influence on the European market has been discussed for some time, it was only in 2024 that the tension began to reach a truly dangerous level. Politics has entered the fray, which could significantly impact the balance of power in the industry.

The European Union is nearing the end of its investigation into Chinese subsidies allegedly received by those brands. The investigation’s outcome may be a significant increase in tariffs on electric cars produced in China. The United States has already taken such a step — from 1 August 2024, tariffs will be increased by as much as 100 per cent.

Of course, China is not remaining idle and is threatening retaliation in kind. In addition to the price war being waged by Chinese electric car manufacturers, there is now a tariff war, in which some players are already deploying their strongest arsenal.

Major European conglomerates are watching from the sidelines and do not necessarily support the EU's actions. For example, there is dissatisfaction in Wolfsburg. Volkswagen Group's Chief Financial Officer Arno Antlitz, in an interview with "Bloomberg," admitted that raising tariffs is not a good solution and will certainly not improve the competitiveness of European brands.

According to Antlitz, manufacturers from the Old Continent should primarily minimize the costs associated with car production. This will allow them to lower their final prices, take on the challenge posed by the Chinese automotive industry, and keep up in the technological race.