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Germany's Habeck in China to talk tariffs

June 21, 2024

German Economy Minister Robert Habeck arrived for a three-day visit to China as the mood in Beijing sours over proposed EU tariffs. The vice chancellor took pains to explain his opposition to them.

China | Besuch Wirtschaftsminister Habeck in Peking
Robert Habeck will try to allay Chinese fears while seeking to deepen German business ties Image: Sebastian Gollnow/dpa/picture alliance

German Economy Minister and Vice Chancellor Robert Habeck landed in Beijing for a three-day visit Friday amid tensions over recent talk of imposing high import tariffs on Chinese electric vehicles (EVs) sold in the European Union (EU).

Habeck is the first high-level European minister to visit China since the EU announced its tariff proposal. Brussels argues that Beijing's largesse with government subsidies gives Chinese carmakers an unfair advantage over European manufacturers.

China has railed against the proposal, threatening a trade war as its automakers urge leadership in Beijing to level import taxes on European internal combustion vehicles.

"The European side continues to escalate trade frictions and could trigger a 'trade war.' The responsibility lies entirely with the European side," according to a statement attributed to the Chinese Commerce Ministry.

Both the Chinese and Germany see the trip as an opportunity for Habeck — as a spokesman for Europe's largest economy and one with deep ties to Chinese industry — to dampen blowback over the issue of tariffs, which German carmakers opposed for fear of retaliation.

China accounted for nearly one-third of all German car sales last year.

Chinese premier snubs Habeck during Beijing visit

Habeck: Germany's China strategy missing European angle

Habeck himself was critical of Germany's own China strategy, calling it shortsighted and out of sync with Chinese strategies vis-vis Europe.

Speaking of a German policy paper issued last year, Habeck said, "A strategy means you have to look into the future and describe at least a path to the future… even if it will never happen as it is described."

"This is a German government China strategy, so what is missing is the European approach," said Habeck, adding that "sooner or later" an update would be required, though without spelling out how the strategy would evolve.

Habeck was also clear, however, that his trip would not put trade tensions to rest.

He faces a balancing act in which German companies seek to continue to invest in China while at the same time reducing risk by trying to walk back reliance on China in key industries.

China has been Germany's top trading partner for eight years running — a streak not snapped until this year when Berlin's trade with the US (€63 billion, $67.4 billion) topped trade with Beijing (€60 billion). 

In May, German exports to China fell 14%, whereas exports to the US rose 4.1%.

German EVs play catch-up in China

js/lo (AFP, dpa, Reuters)