German Chancellor Olaf Scholz and Swedish Prime Minister Ulf Kristersson have cautioned against tariffs on Chinese electric vehicles (EVs) following Washington’s announcement of hefty levies.

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Scholz and Kristersson expressed reservations about possible European tariffs on Chinese EVs when asked at a press conference whether they support the EU to follow suit.

On Tuesday, the United States announced new tariffs on a variety of imports from China, including EVs, in addition to existing tariffs under Section 301. The additional levy will raise tariffs on Chinese EV imports to 100 percent this year. Last October, the European Commission launched an anti-subsidy investigation into the imports of EVs from China.

“50 percent of electric car imports from China come from Western brands that produce cars there and, in that regard, that’s maybe a difference compared to North America. There is an exchange from both sides. European and even some North American manufacturers are successful on the Chinese market, and we have to take that into account,” said Scholz, stressing the importance of trade between the West and China.

“When it comes to import duties, I think that we (Sweden and Germany) essentially have a consensus that it is a bad idea to start dismantling global trade. A broader trade war where we stop each other’s products is, in principle, not the future for large industrialized countries like Germany and Sweden,” said Kristersson.

Around 20 percent of all-electric cars sold across the EU last year, or 300,000 units, were made in China. More than half of them come from Western carmakers, such as Tesla, Dacia and BMW, which produce them in China for export. Major German carmakers also signaled opposition to the possible tariff increases.

“The politicians are now calling for trade restrictions on Chinese car manufacturers. This is an absurdity,” BMW CEO Oliver Zipse told German media Frankfurter Allgemeine Zeitung.

Proposing restrictions on EVs shows a sign of short-sightedness, as it risks incurring countermeasures from the trading partner, leading to a more difficult availability of essential raw materials for European EVs, said Zipse, warning that European carmakers should refrain from repeating past mistakes in the auto industry.

“The European market previously feared the Japanese flooding with cheap cars, then the Korean. And now it is the Chinese,” he said, stressing that the European market is not “flooded” with cheap Chinese electric cars, which only have a share of 0.8 percent in Germany.

Zipse warned against superficial statistics. For example, around 20 percent of EVs in Europe were imported from China last year, while “more than half did not come from Chinese companies at all.”

Regarding the EU’s anti-subsidy investigation on Chinese EVs, Hildegard Mueller, president of the German Association of the Automotive Industry, said that new tariffs and barriers were not the right way forward.

“We believe that building up new tariffs and sliding into mutual protectionism is the wrong way to go. Rather, we need to talk to each other so that it is equally possible for companies in both countries to approach mutually, produce there and sell there,” he pointed out.

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