"We Are Not Asking For Protection": Mercedes CEO Slams EU, Urges No Import Tariffs On Chinese EVs

Tyler Durden's Photo
by Tyler Durden
Friday, Mar 15, 2024 - 08:15 AM

“Don’t raise tariffs. I’m a contrarian, I think go the other way around: take the tariffs that we have and reduce them."

That's what Mercedes-Benz boss Ola Källenius told Brussels this week, urging them to lower tariffs on EVs that are being imported from China. The call comes at the same time the European Commission is mulling whether to raise import duties as Europe continues to grapple with Chinese subsidies. 

Källenius said that the increased competition would "help Europe’s carmakers produce better cars in the long run" and that government protectionism is "going the wrong way", Financial Times reported this week

He called Chinese companies looking to export to Europe a “natural progression of competition and it needs to be met with better product, better technology, more agility.”

“That is the market economy. Let competition play out," he added. “We did not ask for this [probe]. We as companies are not asking for protection, and I believe the best Chinese companies are not asking for protection. They want to compete in the world like everybody else.”

“If we believe protectionism is the thing that gives us long-term success, I believe history tells us that is not the case," he added. “We live in a pragmatic world and realize there are some expectations to the general market economy rule . . . but if we seek our fortune in increased protectionism, we are going the wrong way.”

Källenius' comment is a free market slap in the face to the EU, which has claimed China is "distorting" the EV market. Recall back in September 2023 we wrote that the EU was opening an investigation into Chinese EV subsidies. 

At the time, we noted that European Commission President Ursula von der Leyen was taking exception with the fact that "the global market is flooded with cheap Chinese cars". 

Speaking to parliament late last year, von der Leyen said: “Their price is kept artificially low by huge state subsidies. This is distorting our market. And as we do not accept this distortion from the inside in our market, we do not accept this from the outside.”

Sigrid de Vries, director general of the European Automobile Manufacturers’ Association, commented to Bloomberg: “Von der Leyen’s announcement is a positive signal that the European Commission is recognizing the increasingly asymmetric situation our industry is faced with."

The results of the investigation could wind up furthering the divide between China and the EU. Recall, the EU also complained when President Joe Biden’s administration passed the Inflation Reduction Act, claiming it "violated free trade rules".