The German business chamber in China has said the European Union should invest to become more competitive instead of hiking tariffs on China made electric vehicles, adding to the German government’s efforts to avert or soften the trade curbs.

A Bloomberg report said the call came after the EU decided to impose additional tariffs on EVs shipped from China, taking levies to as much as 48%. This affected Chinese carmakers including BYD, Geely and SAIC Motor which were accused of distorting the market through state subsidies.

“Tariffs as suggested now by the EU will not increase the competitiveness of the automotive industry,” Bloomberg quoted Maximilian Butek, executive director of the German Chamber of Commerce in East China, as saying.

“You cannot protect the automotive industry only in the European Union if they are all over the world,” he added at a press event.

The report noted the German government was working to prevent the EU’s new tariffs on Chinese EVs from coming into force, or at least soften them if a full halt wasn’t possible.

The Chinese government has threatened retaliation across agriculture, aviation and cars with large engines. Any tit-for-tat measures might hurt German manufacturers including Volkswagen, Mercedes-Benz Group and BMW AG which rely heavily on sales in the world’s biggest auto market, Bloomberg said.

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