Germany urges EU action against China to defend carmakers

Germany's finance minister urged the European Union on Thursday to step up action against what he called China's "unfair trade practices" to protect the country's struggling carmakers.

During a visit to Volkswagen's headquarters in Wolfsburg, also home to the carmaker's biggest factory, Finance Minister Lars Klingbeil said Germany would press Brussels to take a stronger stance.

"We cannot, when all is said and done, be naive in our dealings with China," Klingsbeil said after talks with staff representatives and local politicians.

"We need a clear signal at a European level," he said.

Growing Chinese competition, compounded by weak domestic demand and US tariffs, has thrown the German auto industry into crisis, with Volkswagen cutting tens of thousands of jobs and Mercedes-Benz and BMW also downsizing.

Berlin will push for "concrete measures" from Brussels, which oversees the EU's trade policies, in areas including plug-in hybrids and local content requirements, Klingbeil said.

"I am in favour of us standing up to unfair trade practices," he said. "Germany needs to have greater self-confidence and adopt a different, more robust approach toward countries that threaten our industry."

Since 2024 the EU has levied higher tariffs on Chinese-made electric cars, alleging they benefit from unfair state subsidies.

Calls have grown for these levies to be extended to hybrid vehicles, which combine electric motors and internal combustion engines.

Speaking alongside Klingbeil, Daniela Cavallo, a VW staff representative and member of its supervisory board, added her voice to demands for Chinese-made hybrids to face higher tariffs.

"We find ourselves in enormously tough, difficult and unfair competition with China," she said.

"We have great products in Germany. But when we are confronted with unfair conditions, then we have to change that," she said.

Olaf Lies, leader of the German state of Lower Saxony, which is a major shareholder in Volkswagen, said "we still need China as a partner.

"But we must have the same rules here as the ones we have there," he said. "We cannot win against this kind of competition."

Volkswagen, whose models range from premium Porsches to mass-market Seats, recently announced plans to axe a further 50,000 positions globally, taking total projected job cuts to 100,000 in the coming years, or around 15 percent of its workforce.

Germany's powerful IG Metall union has organised nationwide protests for Monday to demand more action to protect the auto industry.

The union expects around 100,000 workers to participate across the country at major manufacturers and suppliers, which have also recently announced a wave of job cuts.