German economy minister ends China visit “content” with progress in looming EU tariff conflict

A visit by German economy minister Robert Habeck to China has led to hopes that a diplomatic solution to the looming trade conflict about possible illicit state support for electric vehicles made in the east Asian country is achievable. After meeting with China’s trade minister Wang Wentao, Habeck said that the government in Beijing had offered a clear roadmap for negotiations about averting the planned EU tariffs on Chinese EVs for the first time in several weeks. “If the European Commission is truly ready for this, China hopes to enter into negotiations soon,” said trade minister Wang, according to a report by public broadcaster ARD. “This is a new development and a little surprising,” Habeck said. He argued that “this is not yet a breakthrough at all,” but added that the unforeseen readiness to talk from the Chinese side had made him “content.”

According to car industry representatives who accompanied Habeck on his trip to the east Asian country, Habeck’s negotiations had indeed brought unexpected progress. “We have to regard this as a stage win,” industry attorney Sabine Stricker-Kellerer told ARD. China’s government has condemned the tariffs as an attempt to suppress the country’s industry and protect Europe’s carmakers from competition. Chinese minister Wang added that his government would file a lawsuit with the World Trade Organisation (WTO) “to defend the legitimate interests of Chinese companies” should no agreement with the EU be reached.

During his visit to east Asia, which also took him to South Korea and Japan, Habeck openly condemned Beijing’s role as a supporter of Russia’s war on Ukraine, arguing that “this is already impacting our relationship negatively,” Süddeutsche Zeitung reported. Habeck said “these things cannot be viewed separately,” explaining that Chinese goods that support the Russian war effort directly clashed with the western military support for Ukraine’s defence.
Germany’s China Strategy from 2023 identifies the country as a “simultaneous partner, competitor and systemic rival” that requires a delicate balance of cooperation and containment.

As one of the east Asian manufacturing heavyweight’s most important trading partners, Germany is regarded as having a generally constructive relationship with Beijing, not least due to Berlin’s efforts to facilitate access for German companies to China’s vast internal market.  Contrary to many of its EU partners, Germany has been reluctant to call for introducing tariffs on Chinese e-cars, partly due to fears over possible retaliatory measures that could hurt Germany’s car industry. Zheng Shanjie, head of China’s influential national development and reform commission, had lauded Germany’s role in moderating the looming “absurd” trade conflict between the EU and Beijing. “We admire the fact that Germany has a different view,” Zheng said, adding that “common interests” in climate action and the decarbonisation of industries outweigh the differences. However, Habeck countered the Chinese commission leader’s comments by siding with the European Commission. “These are not punitive tariffs,” he argued. “It’s a compensation of provided advantages.”