Of course we have to protect our economy from unfair trade practices. However, our reaction on the EU must not lead to us damaging ourselves. That is why the negotiations with China on electric vehicles must continue
By Andreas Hoenig, Niklas Treppner and Franziska Spiecker, dpa
BERLIN – German Chancellor Olaf Scholz said he expects negotiations with China to settle a dispute over the EU’s threatened punitive tariffs on imported Chinese electric cars.
“Of course we have to protect our economy from unfair trade practices,” Scholz said on Wednesday at a conference organized by the BGA foreign trade association in Berlin. However, our reaction on the EU must not lead to us damaging ourselves. That is why the negotiations with China on electric vehicles must continue.”
Scholz went on to say that action must be taken where cheap Chinese imports were actually harming the economy, for example in the case of steel.
The European Commission announced the tariffs in June after an investigation accused Beijing of promoting e-cars with subsidies that distort competition. The Chinese government has responded by accusing the EU of protectionism and is threatening to take countermeasures.
Social Democrat Scholz received French President Emmanuel Macron in Berlin on Wednesday. In the past, Macron had generally expressed his support for punitive measures against China’s e-cars.
Lindner and Habeck hint at “no” vote
German Finance Minister Christian Lindner demanded that Scholz take a clear position on behalf of Germany’s governing coalition against the tariffs.
“Germany cannot agree to a potential trade war with the People’s Republic of China in a key sector,” said Lindner, leader of the pro-business liberal Free Democrats (FDP).
He argued that Germany can’t afford to break with the Chinese market, especially in the automotive sector.
Vice-Chancellor Robert Habeck of the Greens, meanwhile, also expressed concern about the tariffs. He said China has made a proposal for a political solution to the stand-off, and the EU should be open to a discussion.
“Of course, as a market-oriented and export-oriented nation, we have to ensure that there is a level playing field and that everyone abides by the rules,” Habeck said, adding that he is generally concerned about trade barriers but that tariffs may be necessary in some cases.
Earlier in the day, Germany’s influential auto-industry lobby urged Scholz’s government to oppose the tariffs in a vote by EU countries that is scheduled for Friday. If approved, the tariffs would go into force at the end of the month.
“A vote by the EU states to impose high additional tariffs on electric cars from China from the end of October would be a further step away from global cooperation,” Hildegard Müller, the president of the German Association of the Automobile Industry (VDA), told dpa.
“This measure further increases the risk of a global trade conflict,” she added.
German automakers, who have invested in the Chinese market and have relied heavily on sales there, have generally opposed the tariffs out of concern that they could be hit by retaliatory action by the Chinese government.
It remains to be seen how the German government will vote on the measures. A “no” to the punitive tariffs and an abstention are both considered possible.
“The German government must take a clear stance on Friday – and not agree, but reject,” Müller said. “Abstaining is not an option. Berlin is called upon to take a clear stance and at the same time call for further constructive negotiations between all parties involved.”
Mercedes boss Ola Källenius also expressed his opposition to the tariffs on Wednesday: “If I were Germany, I would vote no.”
Such a stance could signal to China that Germany wants to negotiate a fair solution with a level playing field, Källenius said.
