German Minister Proposes Higher EU Tariffs on Chinese Cars to Spur Local Partnerships

A German state official has called for the European Union to consider imposing higher tariffs on automobiles manufactured in China, framing the potential move as a strategic lever to encourage Chinese automakers to establish partnerships and production facilities within Europe.

A Strategic Bargaining Chip

Dirk Panter, the economy minister for the eastern German state of Saxony, told the newspaper *Bild* that the EU should explore increased import duties on Chinese vehicles. He argued that such tariffs could serve as a powerful incentive for Chinese firms to invest locally.

"If a joint venture in Saxony could help avoid European tariffs, that would be a bargaining chip that would allow us to negotiate from a completely different position," Panter stated, according to the report. He stressed that market access should be tied to local investment: "Anyone who wants access to our market must also take responsibility for value creation and employment in Europe."

Local Stakes for Volkswagen

The proposal comes amid significant pressure on Germany's auto industry. Saxony is a major automotive hub and home to a key Volkswagen plant. The minister's comments follow a warning from Volkswagen that it could be forced to close four German factories, including its all-electric Zwickau facility in Saxony, if alternative solutions are not found.

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Volkswagen CEO Oliver Blume has previously acknowledged that producing the company's Chinese-developed models in Europe or forming partnerships with Chinese carmakers are potential options under consideration. Panter's tariff suggestion aligns directly with these potential strategies to secure the future of local manufacturing.

Growing Chinese Competition

The discussion reflects the European auto market's changing landscape, where Chinese manufacturers like BYD are steadily increasing their market share. These companies have found success with models including popular plug-in hybrids, which are not currently subject to the same EU tariffs imposed on all-electric vehicles imported from China.

Panter acknowledged that protectionist measures alone are not a long-term solution. "We will not keep Chinese manufacturers out of Europe," he said, reinforcing his view that the goal should be to integrate them into the European industrial base through local partnerships and production.