Germany's Klingbeil urges measures against 'unfair trade' with Chinese carmakers

By Rachel More

WOLFSBURG, Germany, Sept 17 (Reuters) - Germany's Vice Chancellor Lars Klingbeil on Thursday called for tougher European Union rules, including tariffs on imported plug-in hybrids, to help protect carmakers such as Volkswagen from Chinese competition.

Klingbeil, who is finance minister as well as the most senior Social Democrat in Chancellor Friedrich Merz's coalition, is striving to fend off public discontent over issues, including fuel prices and job cuts at Germany's most politically sensitive corporate employer.

"I am in favour of us standing up against unfair trade practices, and for Germany to adopt a different level of self-confidence and assertiveness towards countries that threaten our industry," Klingbeil told reporters in front of Volkswagen's headquarters in Wolfsburg, Lower Saxony.

In another state, Saxony-Anhalt, the far-right Alternative for Germany, or AfD party, won elections last weekend. A further AfD surge in state-level elections this weekend would tighten the pressure on conservative Chancellor Merz and his government.

The AfD has sought to build support among workers in German industry worried about job security. 

Klingbeil said Volkswagen would continue to transform following a landmark stakeholder deal on cutbacks at the start of this month.

"We are aware that this is the beginning of a transformation but employees can be assured that I, we, stand by them in solidarity," Klingbeil said.

As Chinese automakers have expanded their presence in Europe, the EU has imposed tariffs on imported battery electric vehicles, but excluded hybrids so far.

In addition to calling for tariffs against Chinese-made plug-in hybrid cars, Klingbeil urged the EU to tighten rules on local-content that lay out the percentage of car parts that must be locally made.

Earlier on Thursday, works council leaders at Volkswagen and subsidiaries including Audi and Porsche met with Klingbeil to discuss the restructuring. The premier of Lower Saxony, Volkswagen's second-biggest shareholder, was also present.

The overhaul under CEO Oliver Blume foresees 50,000 additional layoffs and the closure of four plants from early next decade unless another solution can be found. Half of the job cuts would be in Germany.

(Reporting by Rachel MoreWriting by Ludwig Burger; editing by Matthias Williams, Toby Chopra and Barbara Lewis)