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Beijing warned yesterday that escalating frictions with the European Union over electric vehicle imports could trigger a trade war, as Germany’s economy minister arrived in the Chinese capital with the proposed tariffs high on his agenda.
Robert Habeck’s three-day trip to China is the first by a senior European official since Brussels proposed hefty duties on imports of Chinese-made electric vehicles to combat excessive subsidies. That has unleashed countermeasures by China and harsh criticism from Chinese leaders.
In an unexpected twist, Habeck – from the ecologist Greens Party which is a junior partner in Germany’s fractious three-way coalition – criticised Berlin’s 11-month-old China strategy document as too short-termist and not in sync with the China strategies of other EU countries.
This week alone, Chinese carmakers urged Beijing to raise tariffs on imported European petrol-powered cars.
“The European side continues to escalate trade frictions and could trigger a ‘trade war’,” a statement attributed to the Chinese commerce ministry’s spokesperson said. “The responsibility lies entirely with the European side.”
It said that with its dumping probe, the European side had “intimidated and coerced Chinese enterprises, threatened to apply punitive high tariff rates, and demanded overly broad information”.
Habeck’s visit is seen as an opportunity for Germany, Europe’s biggest economy, to explain to Chinese officials the recent tariff announcement while allaying the risk of retaliation from China that could harm German businesses.
Germany’s voice carries particular weight, and its leading car manufacturers have vociferously opposed the EU tariffs. Berlin has urged dialogue while expecting China to compromise.
The country’s carmakers would be the most exposed to any countermoves from China, as almost a third of their sales came from the $18.6 trillion economy last year.
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