Germany’s finance minister has called on the European Union to expand its tariffs on Chinese-made vehicles, warning that government support for manufacturers in China poses a growing threat to European carmakers and thousands of industrial jobs.
Lars Klingbeil, who also serves as Germany’s vice-chancellor, said the EU should consider extending its trade measures to include plug-in hybrid vehicles. These models are not currently subject to the same additional duties imposed on many battery-powered electric cars imported from China.
Speaking at Volkswagen’s headquarters in Wolfsburg, Klingbeil argued that Chinese subsidies allow manufacturers to sell vehicles at prices European companies find difficult to match. He called for a more assertive European trade policy and stronger local-content requirements to support production within the bloc.
The warning comes as Volkswagen and other German carmakers face pressure from high manufacturing costs, weaker demand, competition in electric-vehicle technology, and rising imports of more affordable Chinese models. Volkswagen is implementing a major restructuring programme as it attempts to reduce expenditure and improve competitiveness.
German labour representatives have warned that cost reductions alone will not secure the industry’s future. They argue that stronger European trade protections are also needed to prevent factory closures and safeguard jobs across vehicle production, engineering, batteries, components, and supply chains.
The EU introduced additional tariffs on Chinese electric vehicles in 2024 following an investigation into state subsidies. However, plug-in hybrid cars generally remained subject to lower duties, contributing to a sharp increase in their exports to Europe.
Brussels is now examining whether its existing measures should be widened. European officials are also reportedly asking China to voluntarily limit hybrid-car exports as part of an effort to prevent further escalation and reduce the bloc’s widening trade imbalance.
China has rejected European accusations of unfair industrial support and described the proposed restrictions as protectionist. Beijing has warned that additional measures could damage commercial relations and potentially trigger retaliatory action against European exports.
Germany faces a delicate balance because China is both a major competitor and an important market for German manufacturers. Any broader tariff policy would therefore need to protect European production without causing a trade conflict that could further harm carmakers already operating extensively in China.
The debate is likely to intensify as European governments consider how to preserve their automotive industries while managing the transition to electric and hybrid transportation.
