Germany urges EU action against China to defend carmakers

Germany's finance minister Thursday urged the European Union to step up action against China's "unfair trade practices" to protect the country's struggling carmakers, after a visit to Volkswagen's headquarters.

The car industry in Europe's biggest economy faces growing competition from Chinese carmakers, particularly for sales of electric vehicles, with 10-brand VW planning to cut up to 100,000 jobs in coming years and Mercedes-Benz and BMW also downsizing.

Speaking in Wolfsburg, home to Volkswagen's largest factory and headquarters, Finance Minister Lars Klingbeil said Germany would urge Brussels, which oversees EU trade policy, to take stronger action.

"We cannot when all is said and done be naive in our dealings with China," he said, after holding talks with staff representatives and local politicians.

"We need a clear signal at a European level."

Berlin would push for "concrete measures" from Brussels in areas including plug-in hybrids and local content requirements, he said.

"I am in favour of us standing up to unfair trade practices," Klingbeil said. "Germany needs to have greater self-confidence and adopt a different, more robust approach toward countries that threaten our industry."

The EU has since 2024 levied higher tariffs on Chinese-made electric cars, alleging they benefit from unfair state subsidies.

Calls have grown for these levies to be extended to hybrid vehicles, which combine electric motors and internal combustion engines.

Speaking alongside Klingbeil, Daniela Cavallo -- head of Volkswagen's supervisory board, and a prominent staff representative -- called for tariffs to be implemented on imported hybrids from China.

"We find ourselves in enormously tough, difficult and unfair competition with China," she said.

Germany's powerful IG Metall union has organised nationwide protests outside car plants and suppliers next Monday to demand Berlin does more to protect the auto industry.

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