In an eleventh-hour effort to prevent a full-scale trade war between Europe and China, Germany has made a plea to the European Commission to resist imposing punitive duties on Chinese electric vehicles (EVs). As the European Commission's decision looms, both France and Germany have intensified their lobbying efforts, showcasing conflicting viewpoints on the toughness of the executive's stance against Beijing.

The European Commission is expected to inform Chinese EV-makers on Wednesday about temporary duties resulting from an investigation into unfair state subsidies. The confirmation of these duties by EU member countries, set to take place this fall, is crucial for Commission President Ursula von der Leyen, who requires the support of Paris and Berlin to secure a second term.

While there are discussions about an evidence-based solution that adheres to global trade rules, insiders have acknowledged that the ultimate decision will be politically driven, with von der Leyen's cabinet playing a significant role in the outcome. Anonymous Commission officials have confirmed that the announcement is scheduled for Wednesday.

Presently, the EU applies a 10 percent tariff on all car imports, lower than China's 15 percent tariff. Recognizing that avoiding tariffs altogether is improbable, Germany is now advocating for keeping them as low as possible, ideally at a mutually reciprocal level of 15 percent - the same duty imposed by China on the EU. German Economy Minister Robert Habeck is expected to embark on a damage-control mission to China next week in an attempt to salvage relations, two months after Chancellor Olaf Scholz faced criticism for his perceived subservience to Beijing.

France, which had actively campaigned for the investigation, seeks higher duties on Chinese EVs. Elvire Fabry, a senior research fellow at the Jacques Delors Institute in Paris, suggested that duties around 20-30 percent would provide European manufacturers with the breathing space needed to accelerate investments in the sector and safeguard their market share in Europe.

French officials have rejected the claim that the decision is politically motivated, affirming its objectivity as an investigation conducted by the Commission rather than a political negotiation. However, given the strict timelines of EU trade investigations, delays are no longer possible, necessitating a decision on Chinese EV duties following the European election.

The unfolding dynamics of the post-election transition in the EU are welcomed in Beijing, as it has long sought to weaken the unity among EU member states. With the threat of targeting sensitive industries such as agriculture and aviation, China's potential retaliation puts pressure on France, which aims to shield these sectors from harm. Germany, on the other hand, desires to avoid such retaliatory measures through a mirroring tariff approach, which some experts argue undermines the legitimacy of the investigation.

The impact of the decision on the German economy is complex. While major German automakers maintain strong ties with Beijing, smaller businesses may have different interests, suggesting that the whole German economy would benefit from a more assertive stance towards China. Over the past decade, BMW, Audi, and Mercedes-Benz have sold a staggering 19.2 million cars in China, making up a significant portion of each automaker's global sales.

However, even if the rumored highest duty of 25 percent is imposed, it may not be sufficient to deter Chinese brands due to their significant cost and technology advantages. Chinese EV sales in Europe have grown by 23 percent to nearly 120,000 units in the first four months of this year, demonstrating the resilience of Chinese manufacturers in the face of higher tariffs.

As the European Commission prepares to make its crucial announcement, the outcome will have far-reaching consequences for Europe's trade relationship with China and the delicate balancing act between Germany's economic interests and France's desire for tougher measures.