Germany and France defend EU automotive protections against China

Germany and France have reached a compromise regarding the European Union’s efforts to protect the domestic automotive industry from market flooding, specifically targeting Chinese competition. The proposed Industrial Accelerator Act (IAA) aims to modernize European factories and restrict subsidies to vehicles produced within Europe to counter unfair trade practices.

During an Asia-Pacific conference in South Korea, German Parliamentary State Secretary Stefan Rouenhoff clarified that these measures are a response to specific market inequalities rather than a broad move against specific trading partners. He emphasized that the initiative is not intended to disadvantage countries like South Korea, despite concerns from export-dependent nations.

The recent Franco-German agreement allows suppliers from countries such as the United Kingdom and Norway to obtain “European origin” status. However, other integrated partners, including Turkey, Morocco, and Japan, may remain excluded. Experts warn that such exclusions could significantly impact non-EU automotive sectors that are deeply integrated into European supply chains.