BMW warns of trade dispute fallout as EU considers high tariffs on Chinese EV imports

BMW has taken a strong stance against the European Commission’s proposed high tariffs on China-made electric vehicles (EVs), urging the German government to vote against the measures. In a statement on Wednesday, BMW’s CEO, Oliver Zipse, expressed concerns that the proposed tariffs could spark a trade dispute with China, which would not only harm Germany’s export industry but also provoke retaliatory measures from China, deepening tensions between the two economic powerhouses.

The European Union (EU) is scheduled to vote on October 4 on whether to impose tariffs of up to 45% on EVs imported from China. This vote was originally set for September 25 but was delayed due to ongoing negotiations aimed at avoiding the steep levies. According to media reports, the final date could still be subject to change, as member states grapple with differing opinions on the matter.

The delay reflects broader concerns within the EU regarding protectionist measures and their potential impact on existing trade relationships with China. Many EU countries have built strong economic ties with China, and some fear that imposing such tariffs could hurt their own economic interests. Cui Hongjian, a professor at the Academy of Regional and Global Governance in Beijing, emphasised that these tariffs could undermine the open and cooperative trade relations that have been carefully developed over the years.

For BMW and other German carmakers, the stakes are particularly high. BMW highlighted in its statement that Germany’s auto sector is deeply intertwined with China’s, citing data from the Association of the Automotive Industry, which revealed that German firms exported vehicles and automotive parts worth €26.3 billion to China last year. Meanwhile, €6.8 billion worth of automotive goods were imported from China, underscoring the interdependence between the two markets.

BMW, which manufactures the electric MINI Cooper and Aceman in China, warned that any disruption in trade could have immediate consequences for its business. This is not the first time the German automaker has voiced concerns over the tariffs. In July, Zipse criticized the EU’s approach as impractical and warned that it could harm European manufacturers operating on a global scale.

Other major players in the German auto industry, such as Mercedes-Benz, have also expressed reservations. Mercedes-Benz has stated that it supports liberal trade policies based on World Trade Organization (WTO) rules, emphasising that free trade and fair competition are crucial for prosperity, growth, and innovation.

China, for its part, has been actively engaging in discussions with the EU to find a resolution. Chinese Commerce Minister Wang Wentao recently held talks with EU officials, including European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis. These talks, which took place in Germany, Italy, Belgium, and the EU headquarters, have reportedly led to a preliminary consensus on a path forward for resolving the issue.

As the vote approaches, BMW’s call for caution highlights the delicate balance between protecting local industries and maintaining strong international trade relationships. The outcome of these discussions will not only affect the automotive industry but could also have broader implications for EU-China relations.