Germany’s bid to kill EU duties on Chinese EVs

This is an explanatory story about how qualified majority voting works in the European Union. Are you sitting comfortably? Then we’ll begin.

The bloc decides by qualified majority on some important issues — and the rules are about to be put to the test when its 27 member countries hold a final vote to impose duties on imports of Chinese electric vehicles.

It’s a decision with far-reaching consequences for the European auto industry, which Brussels has ordered to phase out cars powered by diesel or gasoline by 2035. The protective tariffs, to compensate for Chinese subsidies to its fast-growing EV-makers, could buy time for the likes of VW or Stellantis to adapt.

But imposing the duties could also trigger a full-blown trade war with the world’s second-largest economy, with Beijing already threatening to retaliate against exports of European brandy, pork and dairy products — and of high-end autos.

Germany (think of those Porsches or Mercedes that could be cruising the streets of Shanghai) has fought a months-long rearguard action against the tariffs — to no avail. The forthcoming vote would be the last chance for Chancellor Olaf Scholz to stop them.

That’s where qualified majority voting — or QMV — comes in. To block the duties, Berlin would need a double supermajority that would, firstly, be extremely difficult to put together and, secondly, has never before been wielded to overturn an EU trade defense measure.

European Commission President Ursula von der Leyen launched the anti-subsidy probe nearly a year ago, and it concluded by recommending duties ranging between 8 percent and 35 percent on made-in-China EVs. The variations arose because some companies (like Tesla) cooperated with the investigation and others (like SAIC) didn’t, and because the Commission concluded they received different levels of state subsidies.

After a meeting last Thursday in Brussels between EU trade chief Valdis Dombrovskis and Chinese Commerce Minister Wang Wentao failed to reach an agreement, the Commission is expected to send its final recommendations to a confirmatory vote by EU member countries.

This should take place within 10 days of the submission to an obscure panel — called the Trade Defence Instruments Committee — which groups officials sitting in national capitals. And this is where the dreaded rules on qualified majority voting — or QMV — kick in.