In a significant escalation of tensions between the European Union and China, Berlin has cautioned the EU against provoking a "trade war" following a decisive vote to impose additional tariffs on Chinese electric vehicles. The move, which was backed by ten member states, could see tariffs rise up to 35.3 percent on top of existing duties of 10 percent, a decision that has raised concerns among Germany's automotive giants.

Finance Minister Christian Lindner voiced Germany's opposition on social media platform X, urging the EU Commission, led by Ursula von der Leyen, to avoid actions that could trigger a trade conflict. "We need a negotiated solution," he stated, highlighting Germany's stance as one of five countries that voted against the tariff increase. The German government fears that such measures could lead to retaliatory actions from China, jeopardizing its auto manufacturers heavily invested in the region.

Volkswagen, Europe's largest carmaker and a significant player in the Chinese market, also expressed alarm at the decision. The company emphasized that the extra duties "were the wrong approach and would not improve the competitiveness of the European automotive industry." Volkswagen called for continued dialogue between the EU and China to reach a "political solution" before the new tariffs are set to take effect at the end of October.

Oliver Zipse, CEO of German luxury carmaker BMW, echoed these sentiments, describing the tariffs as a "fatal signal for the European automotive industry." He urged for a swift resolution to the dispute, stressing the importance of preventing any countervailing duties that could escalate into a full-blown trade conflict.

As the situation unfolds, industry leaders are calling for a more diplomatic approach to avoid the pitfalls of a trade war, which could have far-reaching implications for both European and Chinese economies. The automotive sector, a cornerstone of Germany's economic landscape, is keenly watching developments in the coming weeks as negotiations continue.