Germany Calls for Talks to Resolve Tariff Dispute with China

Germany’s vice chancellor and minister for economic affairs and climate, Robert Habeck, urged for dialogue between China and the European Union to address the escalating dispute over tariffs. He emphasized the importance of starting talks soon to potentially avoid tariffs, although he noted that tariffs could be warranted if concerns about China’s subsidies for its electric car industry persist.

The European Commission recently proposed imposing tariffs of up to 38 percent on electric cars from China, in addition to the existing 10 percent tariff on imported cars. This decision was made due to the Commission’s findings that China’s electric car sector benefits significantly from government subsidies and state-controlled banking support.

Mr. Habeck clarified that these tariffs are not meant to be punitive but rather a response to subsidies that breach World Trade Organization regulations. The situation puts Germany in a challenging position as China’s electric vehicle exports pose a competitive threat to European automakers, including those in Germany. However, German automakers with substantial operations in China are concerned about potential retaliatory measures from Beijing that could impact their businesses.