Scholz Adviser Says EV Tariffs Not ‘Good Idea’ Ahead of Vote

(Bloomberg) -- Germany remains skeptical about European Union tariffs on imported electric vehicles made in China and is still hoping for a negotiated solution ahead of Friday’s ballot among member states.

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Germany hasn’t decided how it will vote on introducing tariffs as high as 45%, Joerg Kukies, Chancellor Olaf Scholz’s chief economic adviser, said Tuesday in an interview with Bloomberg TV. The European Commission, the EU’s executive arm, proposed the levies after a probe found that China unfairly subsidizes its EV industry.

“We are very integrated into global supply chains so a priori we do not think that tariffs are a good idea,” Kukies said, highlighting that German automakers “are still exporting very heavily to China.”

“A negotiated solution would definitely be preferable to the imposition of tariffs, no matter how calibrated they are,” he added.

European officials are confident the bloc has the numbers to approve the tariffs even as Germany has pressed for a deal with Beijing, Bloomberg reported last week. However, they remain cautious about making a firm prediction after Spanish Prime Minister Pedro Sanchez also spoke out against the levies.

Germany expects a significant number of EU member states to join it in abstaining in Friday’s vote, according to people familiar with the government’s thinking.

Such abstentions would effectively make it more difficult for countries against the tariffs to block the measure from being implemented.

Officials in Berlin also believe that continuing the talks between the EU and China to find an amicable solution is an important element of the implementation regulation, added the people, who asked not to be identified discussing confidential strategy.

Kukies told Bloomberg TV that Germany is evaluating the Commission’s tariff proposal, while discussions between the relevant ministries in Berlin on a unified position are ongoing and should be concluded by Thursday.

“We are seeing that the way the structure of the proposal is composed, there are more and more skeptical voices,” Kukies said. “But again this is a vote that will be held on Friday.”

The EU and China are seeking a compromise that would include a mechanism to control prices and volumes of exports instead of tariffs.

Scholz and French President Emmanuel Macron are expected to discuss the tariffs in Berlin on Wednesday.

--With assistance from Alberto Nardelli.

(Updates with detail on Germany’s voting plans starting in sixth paragraph.)

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