July 17, 2024

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Germany Hopes to Head Off a Trade War With China

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With billions of dollars in trade between China and the European Union at stake, Germany’s second-highest cabinet official called on Saturday for the two sides to engage in talks to try to resolve an escalating dispute over tariffs.

Robert Habeck, who is Germany’s vice chancellor and minister for economic affairs and climate, said that he expected talks to begin soon between China and European officials. He expressed a hope that tariffs could be avoided.

Still, he added that tariffs could be justified if the commission’s concerns about China’s subsidies for its electric car industry were not resolved.

This month, the European Commission, the executive body of the European Union, proposed tariffs of up to 38 percent on electric cars from China, on top of an existing 10 percent tariff on imported cars. The commission said it found that China’s electric car sector was heavily subsidized by the government and state-controlled banking system.

“These tariffs are not punitive,” Mr. Habeck said, adding that the tariffs are intended to offset subsidies that violate World Trade Organization rules.

But Chinese officials strongly criticized the European tariffs after meeting with him. Wang Wentao, the commerce minister, described them as protectionist and called on Germany to help end them. “It is hoped that Germany will play an active role in the E.U. and promote the E.U. and China to move toward each other,” the ministry said in a statement.

The National Development and Reform Commission, China’s top economic planning agency, said in a separate statement that the tariffs were inconsistent with international efforts to address climate change. The commission also warned that “China will take all measures to safeguard the legitimate rights and interests of Chinese companies.”

There is little doubt that the tariffs put Germany in a tricky position. China’s exports of electric vehicles pose a growing challenge to Europe’s automakers, including Germany’s….

Keith Bradsher

2024-06-22 10:44:32

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