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The SPD has won the state elections in Brandenburg with a narrow lead over the AfD. After the devastating results in the European elections and the state elections in Thuringia and Saxony, the Social Democrats can now breathe a sigh of relief.
The AfD’s favorite topic of migration has shaped the election campaign and continues to occupy Europe. A measure with which the German government wants to respond to “security risks in connection with irregular migration” is currently causing irritation. Berlin’s decision to introduce controls at all German borders is offending many. Eric Bonse reports: In Brussels and neighboring countries, there are concerns that the Schengen area of free movement of people and goods could be permanently damaged.
The German government is not cutting a good figure in European trade policy at the moment either – at least that’s how Cora Jungbluth and Etienne Höra see it. The Bertelsmann Stiftung’s Asia experts criticize Germany and other member states’ attempts to prevent long-term tariffs on EVs from China. For the EU’s trade policy credibility, all member states must pull together.
I wish you a pleasant start to the week.
Following the introduction of controls at all German borders, there is growing concern in Brussels that the Schengen area for the free movement of people and goods could suffer permanent damage. Former Commission President Jean-Claude Juncker warns of a relapse into national policies and an erosion of the common rules. Massive criticism has also come from the European Parliament. The EU Commission must intervene, they say.
On Sept. 16, the German government notified the EU authorities of the introduction of border controls. Federal Minister of the Interior Nancy Faeser cited “security risks in connection with irregular migration” and a “tense situation” regarding the accommodation of refugees, explicitly mentioning the war refugees from Ukraine.
The Commission acknowledged the report without comment. They are in close contact with the German government and with Germany’s neighboring countries, said Anitta Hipper, spokesperson for the authorities. When asked by Table.Briefings whether the Commission would issue a statement or even lodge an objection, as is possible under the Schengen Borders Code, there was no response.
This is not surprising, says MEP Birgit Sippel (SPD), who sits on the LIBE Committee as spokesperson for the S&D Group. After all, the EU authority had not taken action in other, more recent cases either. “The Commission, as guardian of the treaties, is not doing its job. For example, there were no infringement proceedings in cases of unlawfully long border controls.”
Criticism has also come from the conservative EPP. Belgian MEP Pascal Arimont has called on the EU Commission to subject the German measures to a thorough legal review. “I have serious doubts that these controls comply with the conditions of the Schengen Borders Code”, he said. Brussels must finally take action.
Austria and Poland had previously sharply criticized the German measures. Under no circumstances would asylum seekers rejected in Germany be accepted in Austria, according to Vienna. Poland’s head of government Donald Tusk said that the border controls were “de facto a large-scale suspension of the Schengen area”. Poland will initiate urgent consultations with other affected countries.
The reactions in the Netherlands and Hungary were even stronger. In The Hague and Budapest, however, the restrictive German approach is not seen as a problem, but rather as confirmation of their own repressive asylum and migration policies. With reference to the German approach, the Netherlands has announced even tougher measures.
The right-wing government in The Hague wants to withdraw from the European asylum system GEAS: “We need to be in charge of our own asylum policy again”, said Asylum Minister Marjolein Faber. Shortly afterwards, the government in Hungary announced a similar move. Head of government Viktor Orbán rejects the CEAS reform passed in April and is calling for an “opt-out”.
So far, these are only declarations of intent without any practical effect. All 27 EU countries would have to agree to an opt-out – which is currently considered impossible in Brussels. However, the heated debate points to a legal loophole: The CEAS reform is not likely to be fully implemented until 2026. Only then will the EU’s external borders be effectively secured – which would then also relieve the internal borders and Germany.
The implementation gap is a problem, says Birgit Sippel, who helped negotiate the CEAS reform. The asylum system is currently dysfunctional. The Commission must therefore become active and push for an earlier implementation of the CEAS. In return, an “orderly distribution of people to all member states for the implementation of asylum procedures” is necessary. This is the only way to prevent further attempts to undermine EU rules.
Former EU Commission President Jean-Claude Juncker is also alarmed. He is concerned to see that politics is once again being made from the “national corner” and that populists are being chased instead of standing in their way, he told ZDF television. “I would like the Commission (…) to speak out and point out the need to ensure that the exception rule does not become the rule.”
However, there is currently no indication that Juncker’s successor in office, Ursula von der Leyen, intends to intervene. So far, the feared chain reaction with border closures and rejections across Europe has failed to materialize, according to Brussels. In addition, the Commission is already working at full speed to implement the CEAS reform and close any loopholes in the law.
The designated new Commissioner for Migration, Magnus Brunner, has a difficult task ahead of him. The Austrian, who like von der Leyen is a member of the EPP and introduced himself as the “new security commissioner”, is under pressure to act. He must take action against irregular migration, while at the same time safeguarding Schengen and freedom of movement. Not everyone is convinced that he will succeed in this.
“The Austrian government is known for very restrictive measures”, said Sippel. “I am therefore very critical of the candidate. His mission letter also lacks clear initial measures for the implementation of GEAS. In general, Ms. von der Leyen expects all future commissioners to come up with their own ideas – without setting a clear direction. There is therefore a great need for clarification here.”
In the hearings of the new Commissioners in the European Parliament planned for October, Brunner must be prepared for tough questions. Concerns about Schengen and CEAS are putting him under pressure even before he takes office.
It is a peculiarity of political arithmetic in France: the winners of the parliamentary elections on July 7 were the left-wing alliance Nouveau Front Populaire (NFP) and the far-right party Rassemblement National (RN). However, neither the NFP nor the RN are represented in the new government of 39 ministers and state secretaries that Prime Minister Michel Barnier presented on Saturday.
As a reminder: In the National Assembly, the French parliament, the NRP has 182 MPs, the RN 126 MPs, the Macron camp 97 MPs and the conservative Les Républicains 47 MPs.
The only representative of the new government who is considered left-wing is Didier Migaud, who was appointed Minister of Justice. The 72-year-old former socialist has held a number of political offices and was close to former socialist Prime Minister Laurent Fabius. However, Migaud is not a member of the left-wing alliance NFP.
Otherwise, the government is made up of political figures from President Macron’s camp and the conservative camp – as is Prime Minister Barnier himself, who is a republican. There is a shift to the right, which is particularly evident in the appointment of conservative MP Bruno Retailleau as Minister of the Interior.
Retailleau caused controversy last year when he spoke of a “return to ethnic origins” in relation to young people from immigrant neighborhoods. He has also taken responsibility for the use of the term “paper French”, which is used by the far right to refer to naturalized French citizens.
In France, foreign policy is the prerogative of the president. Emmanuel Macron wants to preserve this right and has therefore appointed one of his closest confidants, Jean-Noël Barrot, to succeed Stéphane Séjourné as foreign minister. Barrot is loyal to Macron’s side and knows the intricacies of European politics. His head of cabinet, Tristan Aureau, worked as a deputy diplomatic advisor in the European Commission under the new Prime Minister Barnier. His father is the former EU Commissioner Jacques Barrot.
No sooner had the new government taken office than it came under fierce attack from its political opponents. Both the left-wing alliance NFP and the RN announced that they would make use of the possibility of a vote of no confidence. Such a procedure could lead to continued political instability in France – it would not only block the government’s work but could even bring it down.
The new government means “the return of Macronism”, said RN chairman Jordan Bardella. “What the French have democratically sanctioned twice cannot return through miserable power games and political calculation. That is why this is a government that has no future”, Bardella wrote on X.
The leader of the far-left party La France insoumise, Jean-Luc Mélenchon, expressed similar sentiments. He called for Barnier’s government to be got rid of “as quickly as possible”, as in his opinion it has “neither legitimacy nor a future”. Mélenchon also explicitly criticized the decision to make Retailleau Minister of the Interior.
Socialist François Hollande, former President of France and now a member of parliament, would also like to see an end to the newly appointed government. It will “certainly” be necessary to topple the government. It would be up to the Socialists to table a motion of no confidence, he told the TV station TF1.
Barnier and his government team should take these threats seriously. The first issue that needs to be addressed urgently is the budget. Ultimately, it is Parliament that will approve the budget presented by the government – or not. There are tough battles ahead.
According to figures from the Ministry of Finance, France’s deficit could reach 5.6 percent of GDP this year and even 6.2 percent in 2025 – compared to 5.5 percent in 2023. Since the end of July, France – like six other EU member states – has been subject to a European excessive deficit procedure and was actually supposed to send a plan to Brussels by Sept. 20 to reduce the government deficit by 2027. However, France has asked for an extension to the deadline.
President Macron has announced that he wants to bring the deficit below 3 percent by 2027. However, this would require “savings of around 110 billion by 2027”, said the General Directorate of the Treasury in a statement quoted by the French press. The President of the French Court of Auditors, former EU Commissioner Pierre Moscovici, was pessimistic about the plan. “To achieve this goal, around one hundred billion euros would have to be saved within three years”, he said. “This is brutal, politically difficult to implement, socially unacceptable and economically incoherent”, he said.
In July 2024, the EU Commission imposed provisional countervailing duties on EVs from China. These amount to an average of around 21%. They will only be imposed permanently for a period of five years once the Council has taken a position on them. The principle of reverse qualified majority applies: 15 member states representing 65% of the EU population are required to stop the Commission and thus the tariffs.
This decision is particularly controversial because it coincides with the Draghi Report: in four hundred pages, the former Italian prime minister and ECB chief argues that the EU can only strengthen its competitiveness if it cleverly combines its tools: for example, trade and industrial policy. This is particularly true in the field of electromobility, where the weakness of European industry is directly linked to unfair competition from China.
If the EU member states, above all Germany, do not pull together with regard to EV tariffs, the EU not only risks falling even further behind China and the USA in key technologies, but also risks losing its trade policy credibility.
Under EU and WTO law, the hurdles for such tariffs are high, precisely in order to prevent political abuse. The EU Commission’s decision therefore follows a detailed anti-subsidy investigation based on company data. These show that electric cars produced in China have market advantages due to subsidies that are illegal under WTO rules.
In contrast to other countries, such as the USA or Turkey, which – apparently without comparable studies – have imposed tariffs of 100 percent or, in the meantime, an additional 40 percent on EVs from China, the EU is therefore planning an objectively well-founded measure against unfair competition that is rather moderate in international comparison.
In recent months, the EU has also held talks with the Chinese government and EV manufacturers to find an alternative solution. However, the Commission rejected an offer from Chinese EV manufacturers regarding price commitments to compensate for the subsidies as insufficient after a thorough examination. At the meeting between Chinese Trade Minister Wang Wentao and EU Trade Commissioner Valdis Dombrovskis on Sept. 19 in Brussels, no political agreement was reached either.
However, the Commission has once again extended the already-expired deadline for manufacturers to submit price undertakings. If they submit a sufficient offer, the Commission can close the procedure, otherwise the next step is the vote of the member states on the countervailing duties, which must take place before Oct. 31.
Several member states, including, unsurprisingly, Hungary, but also Germany and Spain, are currently actively trying to stop the tariffs. This makes it all too clear that the much-vaunted and urgent unity of the EU and its member states vis-à-vis China has so far remained an illusion: China is repeatedly managing to divide the EU on key trade and industrial policy issues – and at the same time the EU is failing to stay together on its own.
In Germany, it is the fear of retaliatory measures against the automotive industry, which is heavily dependent on business with China, that has prompted Chancellor Olaf Scholz to campaign against the tariffs. In Spain, it is the hope of a Chinese investment worth billions following a trip to Beijing by Prime Minister Pedro Sánchez at the beginning of September and that the Spanish pork industry will be spared. Hungary has been happy to play the role of a “Trojan horse” for Chinese interests in the EU for some time now anyway.
If, despite clear evidence of distortions of competition to the detriment of Europe, the member states were to speak out against the countervailing duties and instead focus on their own particular economic interests, this would deeply undermine the credibility of the EU’s trade and industrial policy agenda. It would be a veritable invitation to third countries: Effective policies in the EU’s interests can be undermined via European capitals.
This would also send a strong political signal in light of the increasing geopoliticization of trade relations and efforts to “de-risk” China as part of the economic security strategy proposed by the Commission in 2023.
There are indeed viable economic policy arguments against the measure: Tariffs on imported products do not in themselves create a competitive industry in Europe. They merely compensate for unfair cost advantages resulting from subsidies and are thus intended to enable actual competition. The period during which the tariffs exist must therefore be used creatively and intelligently – both by industry and by politicians.
If this does not succeed, consumers in the EU will pay unnecessarily higher prices. Companies should therefore make every effort to establish and expand their competitiveness during this period. The Commission and member states should accompany the tariffs with further measures to promote local manufacturers – and coordinate more closely than before.
At present, however, the impression is that the member states working against the tariffs are driven by other, much less convincing reasons: The industries that China is threatening with tariffs form strong and well-organized interest groups that neither Scholz nor Sánchez want to antagonize. However, such particularistic consideration is certainly not in Europe’s long-term interests. Europe’s future should not be decided by individual sectors or even companies.
Those who argue against the tariffs are underestimating the potential to meet China on an equal footing. In view of major structural problems – youth unemployment, the real estate bubble and a generally weakening economy – as well as the uncertain impact of the US election on the already strained Sino-American relationship, China needs the EU and access to the European market.
It is therefore all the more important that the EU and its member states remain consistent on the customs issue and do not jeopardize the EU’s ability to act and its credibility in terms of trade policy vis-à-vis China and others. The EU can only remain competitive if it can simultaneously defend itself against distortions of competition by third parties – as the Draghi Report also argues. At this political moment, stopping tariffs on EVs manufactured in China would send exactly the wrong signal.
Cora Jungbluth has been working at the Bertelsmann Stiftung since August 2012 and is Senior Expert China and Asia-Pacific. Etienne Höra has been Project Manager at the Bertelsmann Stiftung since October 2023 and works on strategic partnerships between Europe and Asia.
The Timmermans era is over, commented EPP leader Manfred Weber on Ursula von der Leyen’s personnel tableau after its presentation in Strasbourg. By this, he means that there is no longer an all-powerful Commission Vice-President who dominates EU climate policy. Although von der Leyen has distributed the climate and environment portfolio among many heads, the responsibilities are in fact so scattered that no one person can steer an entire policy area alone.
However, with her portfolio, former Spanish Environment Minister and designated Competition Commissioner Teresa Ribera is well placed to take a powerful position in the new Commission.
Ribera is considered a skillful negotiator. She is ambitious, but diplomatic. As a broker between industrial and climate policy, her job is to ensure that the EU does not lose sight of its climate targets and still remains competitive. She will be closely watched from all sides, predicts Linda Kalcher from the Brussels think tank Strategic Perspectives, “by the center-right EPP party, industry and international partners”.
As Executive Vice President, it is also up to Ribera to mediate disputes or put her foot down from time to time. Even if von der Leyen’s team emphasizes that climate protection, industrial policy and competitiveness are major tasks, conflicts between the policy areas are foreseeable.
Precisely because von der Leyen has created overlapping portfolios and economic growth with clean tech has yet to be tested, the next Commission is facing some major conflicts. These are most likely to be between the two Executive Vice-Presidents Ribera and Industry Commissioner Stéphane Séjourné. It remains to be seen whether Ribera will decide in favor of the interests of industry in terms of Europe’s competitiveness or in favor of climate protection.
Von der Leyen has therefore not only done the climate protector a favor with this area of responsibility. As Competition Commissioner, she will probably not be able to maintain her hard line on climate protection measures throughout.
Born in Madrid, she has been a member of the Spanish Socialist Party (PSOE) since 2011. She initially worked as Secretary of State for Climate Change and eventually became Environment Minister under Prime Minister Pedro Sánchez in 2018. After Chile had to withdraw from the UN Climate Change Conference in 2019 due to the domestic political situation, she brought the COP25 to Madrid without further ado. Last year, she was the lead negotiator for the EU member states on phasing out fossil fuels at COP28 in Dubai. Lukas Knigge
The SPD has won the state elections in Brandenburg with a narrow lead over the AfD. After the devastating results in the European elections and the state elections in Thuringia and Saxony, the Social Democrats can now breathe a sigh of relief.
The AfD’s favorite topic of migration has shaped the election campaign and continues to occupy Europe. A measure with which the German government wants to respond to “security risks in connection with irregular migration” is currently causing irritation. Berlin’s decision to introduce controls at all German borders is offending many. Eric Bonse reports: In Brussels and neighboring countries, there are concerns that the Schengen area of free movement of people and goods could be permanently damaged.
The German government is not cutting a good figure in European trade policy at the moment either – at least that’s how Cora Jungbluth and Etienne Höra see it. The Bertelsmann Stiftung’s Asia experts criticize Germany and other member states’ attempts to prevent long-term tariffs on EVs from China. For the EU’s trade policy credibility, all member states must pull together.
I wish you a pleasant start to the week.
Following the introduction of controls at all German borders, there is growing concern in Brussels that the Schengen area for the free movement of people and goods could suffer permanent damage. Former Commission President Jean-Claude Juncker warns of a relapse into national policies and an erosion of the common rules. Massive criticism has also come from the European Parliament. The EU Commission must intervene, they say.
On Sept. 16, the German government notified the EU authorities of the introduction of border controls. Federal Minister of the Interior Nancy Faeser cited “security risks in connection with irregular migration” and a “tense situation” regarding the accommodation of refugees, explicitly mentioning the war refugees from Ukraine.
The Commission acknowledged the report without comment. They are in close contact with the German government and with Germany’s neighboring countries, said Anitta Hipper, spokesperson for the authorities. When asked by Table.Briefings whether the Commission would issue a statement or even lodge an objection, as is possible under the Schengen Borders Code, there was no response.
This is not surprising, says MEP Birgit Sippel (SPD), who sits on the LIBE Committee as spokesperson for the S&D Group. After all, the EU authority had not taken action in other, more recent cases either. “The Commission, as guardian of the treaties, is not doing its job. For example, there were no infringement proceedings in cases of unlawfully long border controls.”
Criticism has also come from the conservative EPP. Belgian MEP Pascal Arimont has called on the EU Commission to subject the German measures to a thorough legal review. “I have serious doubts that these controls comply with the conditions of the Schengen Borders Code”, he said. Brussels must finally take action.
Austria and Poland had previously sharply criticized the German measures. Under no circumstances would asylum seekers rejected in Germany be accepted in Austria, according to Vienna. Poland’s head of government Donald Tusk said that the border controls were “de facto a large-scale suspension of the Schengen area”. Poland will initiate urgent consultations with other affected countries.
The reactions in the Netherlands and Hungary were even stronger. In The Hague and Budapest, however, the restrictive German approach is not seen as a problem, but rather as confirmation of their own repressive asylum and migration policies. With reference to the German approach, the Netherlands has announced even tougher measures.
The right-wing government in The Hague wants to withdraw from the European asylum system GEAS: “We need to be in charge of our own asylum policy again”, said Asylum Minister Marjolein Faber. Shortly afterwards, the government in Hungary announced a similar move. Head of government Viktor Orbán rejects the CEAS reform passed in April and is calling for an “opt-out”.
So far, these are only declarations of intent without any practical effect. All 27 EU countries would have to agree to an opt-out – which is currently considered impossible in Brussels. However, the heated debate points to a legal loophole: The CEAS reform is not likely to be fully implemented until 2026. Only then will the EU’s external borders be effectively secured – which would then also relieve the internal borders and Germany.
The implementation gap is a problem, says Birgit Sippel, who helped negotiate the CEAS reform. The asylum system is currently dysfunctional. The Commission must therefore become active and push for an earlier implementation of the CEAS. In return, an “orderly distribution of people to all member states for the implementation of asylum procedures” is necessary. This is the only way to prevent further attempts to undermine EU rules.
Former EU Commission President Jean-Claude Juncker is also alarmed. He is concerned to see that politics is once again being made from the “national corner” and that populists are being chased instead of standing in their way, he told ZDF television. “I would like the Commission (…) to speak out and point out the need to ensure that the exception rule does not become the rule.”
However, there is currently no indication that Juncker’s successor in office, Ursula von der Leyen, intends to intervene. So far, the feared chain reaction with border closures and rejections across Europe has failed to materialize, according to Brussels. In addition, the Commission is already working at full speed to implement the CEAS reform and close any loopholes in the law.
The designated new Commissioner for Migration, Magnus Brunner, has a difficult task ahead of him. The Austrian, who like von der Leyen is a member of the EPP and introduced himself as the “new security commissioner”, is under pressure to act. He must take action against irregular migration, while at the same time safeguarding Schengen and freedom of movement. Not everyone is convinced that he will succeed in this.
“The Austrian government is known for very restrictive measures”, said Sippel. “I am therefore very critical of the candidate. His mission letter also lacks clear initial measures for the implementation of GEAS. In general, Ms. von der Leyen expects all future commissioners to come up with their own ideas – without setting a clear direction. There is therefore a great need for clarification here.”
In the hearings of the new Commissioners in the European Parliament planned for October, Brunner must be prepared for tough questions. Concerns about Schengen and CEAS are putting him under pressure even before he takes office.
It is a peculiarity of political arithmetic in France: the winners of the parliamentary elections on July 7 were the left-wing alliance Nouveau Front Populaire (NFP) and the far-right party Rassemblement National (RN). However, neither the NFP nor the RN are represented in the new government of 39 ministers and state secretaries that Prime Minister Michel Barnier presented on Saturday.
As a reminder: In the National Assembly, the French parliament, the NRP has 182 MPs, the RN 126 MPs, the Macron camp 97 MPs and the conservative Les Républicains 47 MPs.
The only representative of the new government who is considered left-wing is Didier Migaud, who was appointed Minister of Justice. The 72-year-old former socialist has held a number of political offices and was close to former socialist Prime Minister Laurent Fabius. However, Migaud is not a member of the left-wing alliance NFP.
Otherwise, the government is made up of political figures from President Macron’s camp and the conservative camp – as is Prime Minister Barnier himself, who is a republican. There is a shift to the right, which is particularly evident in the appointment of conservative MP Bruno Retailleau as Minister of the Interior.
Retailleau caused controversy last year when he spoke of a “return to ethnic origins” in relation to young people from immigrant neighborhoods. He has also taken responsibility for the use of the term “paper French”, which is used by the far right to refer to naturalized French citizens.
In France, foreign policy is the prerogative of the president. Emmanuel Macron wants to preserve this right and has therefore appointed one of his closest confidants, Jean-Noël Barrot, to succeed Stéphane Séjourné as foreign minister. Barrot is loyal to Macron’s side and knows the intricacies of European politics. His head of cabinet, Tristan Aureau, worked as a deputy diplomatic advisor in the European Commission under the new Prime Minister Barnier. His father is the former EU Commissioner Jacques Barrot.
No sooner had the new government taken office than it came under fierce attack from its political opponents. Both the left-wing alliance NFP and the RN announced that they would make use of the possibility of a vote of no confidence. Such a procedure could lead to continued political instability in France – it would not only block the government’s work but could even bring it down.
The new government means “the return of Macronism”, said RN chairman Jordan Bardella. “What the French have democratically sanctioned twice cannot return through miserable power games and political calculation. That is why this is a government that has no future”, Bardella wrote on X.
The leader of the far-left party La France insoumise, Jean-Luc Mélenchon, expressed similar sentiments. He called for Barnier’s government to be got rid of “as quickly as possible”, as in his opinion it has “neither legitimacy nor a future”. Mélenchon also explicitly criticized the decision to make Retailleau Minister of the Interior.
Socialist François Hollande, former President of France and now a member of parliament, would also like to see an end to the newly appointed government. It will “certainly” be necessary to topple the government. It would be up to the Socialists to table a motion of no confidence, he told the TV station TF1.
Barnier and his government team should take these threats seriously. The first issue that needs to be addressed urgently is the budget. Ultimately, it is Parliament that will approve the budget presented by the government – or not. There are tough battles ahead.
According to figures from the Ministry of Finance, France’s deficit could reach 5.6 percent of GDP this year and even 6.2 percent in 2025 – compared to 5.5 percent in 2023. Since the end of July, France – like six other EU member states – has been subject to a European excessive deficit procedure and was actually supposed to send a plan to Brussels by Sept. 20 to reduce the government deficit by 2027. However, France has asked for an extension to the deadline.
President Macron has announced that he wants to bring the deficit below 3 percent by 2027. However, this would require “savings of around 110 billion by 2027”, said the General Directorate of the Treasury in a statement quoted by the French press. The President of the French Court of Auditors, former EU Commissioner Pierre Moscovici, was pessimistic about the plan. “To achieve this goal, around one hundred billion euros would have to be saved within three years”, he said. “This is brutal, politically difficult to implement, socially unacceptable and economically incoherent”, he said.
In July 2024, the EU Commission imposed provisional countervailing duties on EVs from China. These amount to an average of around 21%. They will only be imposed permanently for a period of five years once the Council has taken a position on them. The principle of reverse qualified majority applies: 15 member states representing 65% of the EU population are required to stop the Commission and thus the tariffs.
This decision is particularly controversial because it coincides with the Draghi Report: in four hundred pages, the former Italian prime minister and ECB chief argues that the EU can only strengthen its competitiveness if it cleverly combines its tools: for example, trade and industrial policy. This is particularly true in the field of electromobility, where the weakness of European industry is directly linked to unfair competition from China.
If the EU member states, above all Germany, do not pull together with regard to EV tariffs, the EU not only risks falling even further behind China and the USA in key technologies, but also risks losing its trade policy credibility.
Under EU and WTO law, the hurdles for such tariffs are high, precisely in order to prevent political abuse. The EU Commission’s decision therefore follows a detailed anti-subsidy investigation based on company data. These show that electric cars produced in China have market advantages due to subsidies that are illegal under WTO rules.
In contrast to other countries, such as the USA or Turkey, which – apparently without comparable studies – have imposed tariffs of 100 percent or, in the meantime, an additional 40 percent on EVs from China, the EU is therefore planning an objectively well-founded measure against unfair competition that is rather moderate in international comparison.
In recent months, the EU has also held talks with the Chinese government and EV manufacturers to find an alternative solution. However, the Commission rejected an offer from Chinese EV manufacturers regarding price commitments to compensate for the subsidies as insufficient after a thorough examination. At the meeting between Chinese Trade Minister Wang Wentao and EU Trade Commissioner Valdis Dombrovskis on Sept. 19 in Brussels, no political agreement was reached either.
However, the Commission has once again extended the already-expired deadline for manufacturers to submit price undertakings. If they submit a sufficient offer, the Commission can close the procedure, otherwise the next step is the vote of the member states on the countervailing duties, which must take place before Oct. 31.
Several member states, including, unsurprisingly, Hungary, but also Germany and Spain, are currently actively trying to stop the tariffs. This makes it all too clear that the much-vaunted and urgent unity of the EU and its member states vis-à-vis China has so far remained an illusion: China is repeatedly managing to divide the EU on key trade and industrial policy issues – and at the same time the EU is failing to stay together on its own.
In Germany, it is the fear of retaliatory measures against the automotive industry, which is heavily dependent on business with China, that has prompted Chancellor Olaf Scholz to campaign against the tariffs. In Spain, it is the hope of a Chinese investment worth billions following a trip to Beijing by Prime Minister Pedro Sánchez at the beginning of September and that the Spanish pork industry will be spared. Hungary has been happy to play the role of a “Trojan horse” for Chinese interests in the EU for some time now anyway.
If, despite clear evidence of distortions of competition to the detriment of Europe, the member states were to speak out against the countervailing duties and instead focus on their own particular economic interests, this would deeply undermine the credibility of the EU’s trade and industrial policy agenda. It would be a veritable invitation to third countries: Effective policies in the EU’s interests can be undermined via European capitals.
This would also send a strong political signal in light of the increasing geopoliticization of trade relations and efforts to “de-risk” China as part of the economic security strategy proposed by the Commission in 2023.
There are indeed viable economic policy arguments against the measure: Tariffs on imported products do not in themselves create a competitive industry in Europe. They merely compensate for unfair cost advantages resulting from subsidies and are thus intended to enable actual competition. The period during which the tariffs exist must therefore be used creatively and intelligently – both by industry and by politicians.
If this does not succeed, consumers in the EU will pay unnecessarily higher prices. Companies should therefore make every effort to establish and expand their competitiveness during this period. The Commission and member states should accompany the tariffs with further measures to promote local manufacturers – and coordinate more closely than before.
At present, however, the impression is that the member states working against the tariffs are driven by other, much less convincing reasons: The industries that China is threatening with tariffs form strong and well-organized interest groups that neither Scholz nor Sánchez want to antagonize. However, such particularistic consideration is certainly not in Europe’s long-term interests. Europe’s future should not be decided by individual sectors or even companies.
Those who argue against the tariffs are underestimating the potential to meet China on an equal footing. In view of major structural problems – youth unemployment, the real estate bubble and a generally weakening economy – as well as the uncertain impact of the US election on the already strained Sino-American relationship, China needs the EU and access to the European market.
It is therefore all the more important that the EU and its member states remain consistent on the customs issue and do not jeopardize the EU’s ability to act and its credibility in terms of trade policy vis-à-vis China and others. The EU can only remain competitive if it can simultaneously defend itself against distortions of competition by third parties – as the Draghi Report also argues. At this political moment, stopping tariffs on EVs manufactured in China would send exactly the wrong signal.
Cora Jungbluth has been working at the Bertelsmann Stiftung since August 2012 and is Senior Expert China and Asia-Pacific. Etienne Höra has been Project Manager at the Bertelsmann Stiftung since October 2023 and works on strategic partnerships between Europe and Asia.
The Timmermans era is over, commented EPP leader Manfred Weber on Ursula von der Leyen’s personnel tableau after its presentation in Strasbourg. By this, he means that there is no longer an all-powerful Commission Vice-President who dominates EU climate policy. Although von der Leyen has distributed the climate and environment portfolio among many heads, the responsibilities are in fact so scattered that no one person can steer an entire policy area alone.
However, with her portfolio, former Spanish Environment Minister and designated Competition Commissioner Teresa Ribera is well placed to take a powerful position in the new Commission.
Ribera is considered a skillful negotiator. She is ambitious, but diplomatic. As a broker between industrial and climate policy, her job is to ensure that the EU does not lose sight of its climate targets and still remains competitive. She will be closely watched from all sides, predicts Linda Kalcher from the Brussels think tank Strategic Perspectives, “by the center-right EPP party, industry and international partners”.
As Executive Vice President, it is also up to Ribera to mediate disputes or put her foot down from time to time. Even if von der Leyen’s team emphasizes that climate protection, industrial policy and competitiveness are major tasks, conflicts between the policy areas are foreseeable.
Precisely because von der Leyen has created overlapping portfolios and economic growth with clean tech has yet to be tested, the next Commission is facing some major conflicts. These are most likely to be between the two Executive Vice-Presidents Ribera and Industry Commissioner Stéphane Séjourné. It remains to be seen whether Ribera will decide in favor of the interests of industry in terms of Europe’s competitiveness or in favor of climate protection.
Von der Leyen has therefore not only done the climate protector a favor with this area of responsibility. As Competition Commissioner, she will probably not be able to maintain her hard line on climate protection measures throughout.
Born in Madrid, she has been a member of the Spanish Socialist Party (PSOE) since 2011. She initially worked as Secretary of State for Climate Change and eventually became Environment Minister under Prime Minister Pedro Sánchez in 2018. After Chile had to withdraw from the UN Climate Change Conference in 2019 due to the domestic political situation, she brought the COP25 to Madrid without further ado. Last year, she was the lead negotiator for the EU member states on phasing out fossil fuels at COP28 in Dubai. Lukas Knigge