Germany's Abstention on EU's Chinese EV Tariff Vote Sparks Concerns

Germany has decided to abstain from Monday's European Union vote on implementing provisional tariffs on Chinese electric vehicles. The decision aligns with ongoing anti-subsidy investigations and talks between the EU and China. German carmakers are concerned about potential trade conflicts, given their significant sales in China.

Germany is set to abstain in Monday's vote by European Union member states on imposing provisional tariffs on Chinese electric vehicles, sources told Reuters on Friday. The European Union is implementing provisional tariffs of up to 37.6% on EVs imported from China, escalating tensions with Beijing in the EU's most significant trade case yet.

Germany will abstain as the anti-subsidy investigation continues and negotiations between the EU Commission and the Chinese government are ongoing, said sources. German carmakers, which sell a third of their vehicles yearly in China, are concerned about potential retaliatory measures and fear a trade conflict with their second most important trading partner.

This initial vote is not binding. At the provisional stage, the Commission has full authority to impose duties, although it consults EU members and is expected to consider their opinions. This will be followed by a final vote at the end of the investigation when the Commission can propose definitive duties, typically lasting five years.

Its proposal could be blocked if a qualified majority of the European Union's 27 members is opposed. A qualified majority requires 15 EU members representing 65% of the EU population to be in favor.

(With inputs from agencies.)