The punitive tariffs on electric cars from China announced by the EU Commission have met with a mixed response from top German economists.

Ifo President Clemens Fuest does not think the move is a good idea. DIW head Marcel Fratzscher and competition economist Jens Südekum, on the other hand, speak of a necessary step to prevent the domestic car industry from suffering the same fate as the doomed solar industry.

"The EU should do without it," Ifo President Fuest told the news agency Reuters on Wednesday about the announced EU punitive tariffs. There were two disadvantages. Firstly, China is an important sales market for European cars and EU punitive tariffs would trigger Chinese countermeasures. "A trade war serves no one," said Fuest. Secondly, cheap electric cars from China would facilitate the electrification of car traffic and thus the decarbonization of the economy.

Fratzscher, on the other hand, believes that the EU measures are necessary to defend the principles of a fair market economy and to protect European business locations. "Germany and Europe should not repeat the mistakes of the past, such as with the solar industry, and sacrifice long-term competitiveness for short-term profits," said the President of the German Institute for Economic Research (DIW). "It is undeniable that Chinese manufacturers enjoy unfair competitive advantages due to massive state subsidies." Nevertheless, the chosen compromise could prove to be inadequate and possibly counterproductive. It carries the risk of Chinese e-cars gaining market share in Europe despite the tariffs and sanctions being imposed on European companies at the same time. "Closer coordination with the USA would therefore be advisable in order to ensure a stronger joint response to the challenges posed by the Chinese market," said Fratzscher.

Competition economist Jens Südekum from Heinrich Heine University Düsseldorf comes to a similar conclusion. "The decision was ultimately imperative, as China massively subsidizes its own industry, thereby distorting competition," said the member of the Scientific Advisory Board of the Federal Ministry of Economics. "The punitive tariffs are not about protectionism. It is Europe's reaction to unfair Chinese competitive practices."


Subsidies to support one's own industry are actually prohibited by the World Trade Organization (WTO). WTO member China is nevertheless doing so in many areas and is thus violating applicable law. In the case of solar panels, Chinese subsidies are perhaps still acceptable. "Here, Europe can be happy about the cheaper imports from China that result from the subsidies," said Südekum. "This will enable Europe to achieve its solar energy expansion targets faster and more cheaply. There is hardly any domestic solar industry left in Europe." But the situation is different for electric cars. "This is a key industry on which millions of jobs depend," says the expert. "Europe cannot simply stand by and watch as the industry is demolished by Chinese subsidies."

The Kiel Institute for the World Economy (IfW) estimates that Chinese industrial subsidies currently amount to more than 200 billion euros per year. "These subsidies distort competition and can in principle justify countermeasures by the EU," said IfW President Moritz Schularick. The latest decision shows the European Union's determination to ensure fair competitive conditions on the European market.

The EU Commission had previously announced punitive tariffs on certain electric cars from China. Models from the manufacturers BYD, Geely and SAIC are affected, the Brussels authority announced. An import duty of 17.4 percent is to apply to BYD, 20 percent to Geely and 38.1 percent to Volkswagen partner group SAIC. The Commission justified the move by stating that e-car imports from China were damaging the European car industry.

(Report by Rene Wagner, edited by Kerstin Dörr. If you have any questions, please contact our editorial team at