German economy minister Robert Habeck arrived in China on Friday to try and salvage the strained relationship between the two countries, after a European Union’s proposal to hike tariffs on Chinese electric vehicles is bringing Beijing over possible retaliation.
China has already started an anti-dumping investigation against EU pork imports, in what has been largely considered a retaliation against the proposed new tariffs on EVs from China. EU authorities completed a preliminary investigation over potential unfair state help and are proposing new import duties of between 17% to 38% according to the company. Reuters wrote that Chinese carmakers are urging to also hike duties on imported European gasoline-powered cars, a move that will hurt German producers the most.
Chinese authorities are blaming EU officials for the rise in tension, accusing them of escalating the situation, and according to a statement from the Chinese commerce ministry potentially they “could trigger a ‘trade war’” between China and the bloc. The same statement said that during their probe EU officials “intimidated and coerced Chinese enterprises, threatened to apply punitive high tariff rates, and demanded overly broad information.”
Habeck is visiting China and will meet Chinese Prime Minister Li Qiang with the aim of explaining the European position and try to avert possible measures that may hurt German economy. German export-heavy economy has China as one of its main trade partners, especially in the crucial automotive sector.
During an embassy dinner in Beijing, Habeck threw under the bus the new German strategy with China. The current government outlined its strategy in a 64-page document released in July 2023 that establishes China’s malpractices but fell short of drawing out a strategy to contain and steer away from dependency on China. He lamented that what is missing is a European approach to trade with China.
