Germany's Klingbeil urges measures against 'unfair trade' with Chinese carmakers

Germany Pushes for EU Tariffs on Chinese Plug-In Hybrids to Protect Local Industry

By Rachel More

Germany's Response to Chinese Competition in the Automotive Sector

WOLFSBURG, Germany, Sept 17 (Reuters) - Germany's Vice Chancellor Lars Klingbeil on Thursday called for tougher European Union rules, including tariffs on imported plug-in hybrids, to help protect carmakers such as Volkswagen from Chinese competition.

Political Context and Economic Pressures

Klingbeil, who is finance minister as well as the most senior Social Democrat in Chancellor Friedrich Merz's coalition, is striving to fend off public discontent over issues, including fuel prices and job cuts at Germany's most politically sensitive corporate employer.

Calls for Assertive Trade Policy

"I am in favour of us standing up against unfair trade practices, and for Germany to adopt a different level of self-confidence and assertiveness towards countries that threaten our industry," Klingbeil told reporters in front of Volkswagen's headquarters in Wolfsburg, Lower Saxony.

Rising Political Pressure from AfD

In another state, Saxony-Anhalt, the far-right Alternative for Germany, or AfD party, won elections last weekend. A further AfD surge in state-level elections this weekend would tighten the pressure on conservative Chancellor Merz and his government.

AfD's Appeal to Industrial Workers

The AfD has sought to build support among workers in German industry worried about job security. 

Volkswagen's Transformation and Stakeholder Engagement

Klingbeil said Volkswagen would continue to transform following a landmark stakeholder deal on cutbacks at the start of this month.

Government Solidarity with Workers

"We are aware that this is the beginning of a transformation but employees can be assured that I, we, stand by them in solidarity," Klingbeil said.

EU Tariffs and Local-Content Rules

As Chinese automakers have expanded their presence in Europe, the EU has imposed tariffs on imported battery electric vehicles, but excluded hybrids so far.

Proposed Measures Against Chinese Plug-In Hybrids

In addition to calling for tariffs against Chinese-made plug-in hybrid cars, Klingbeil urged the EU to tighten rules on local-content that lay out the percentage of car parts that must be locally made.

Volkswagen Restructuring and Job Cuts

Earlier on Thursday, works council leaders at Volkswagen and subsidiaries including Audi and Porsche met with Klingbeil to discuss the restructuring. The premier of Lower Saxony, Volkswagen's second-biggest shareholder, was also present.

Potential Layoffs and Plant Closures

The overhaul under CEO Oliver Blume foresees 50,000 additional layoffs and the closure of four plants from early next decade unless another solution can be found. Half of the job cuts would be in Germany.

(Reporting by Rachel MoreWriting by Ludwig Burger; editing by Matthias Williams, Toby Chopra and Barbara Lewis)