Scholz renews call for free trade ahead of EU announcement on Chinese EV tariffs

Erecting trade barriers to shield national industries from foreign competition is not the way to ensure European companies remain competitive, said German chancellor Olaf Scholz during a visit to carmaker Opel, reported news agency dpa in an article in Die Welt. “We shouldn’t close our market to foreign companies because we don’t want this to happen to our companies either,” Scholz said. Introducing new irregular trade barriers would “ultimately make everything more expensive and everyone poorer,” he said, adding that “progress and renewal” combined with “fair and free global trade” are the right way forward to ensure competitiveness. The chancellor sought to reassure workers at Opel, saying that the company “will prevail against new competitors, for example from China, in a fair competition.” Scholz reiterated the German government’s commitment to electric mobility, arguing that “those who want to turn back the clock on this not only jeopardise what we’ve achieved so far, but also our future as an industry location.”

The EU, which has been debating possible tariffs on Chinese products like electric cars or solar panels, is set to make an announcement on EV tariffs as soon as this week, reported Reuters. Proponents argue tariffs would shield European businesses from what are perceived as unlawful subsidies granted by the Chinese government to gain a foothold, or even achieve dominance, as a supplier of key future technologies. However, Germany has so far remained reluctant to get behind a more protectionist approach by the EU, as it fears retaliations by the Chinese government that could particularly hurt its own export-oriented economy and automotive industry. After the U.S. government introduced tariffs of 100 percent on electric cars coming from China, the pressure on EU governments to formulate a coherent response to the major economy has been mounting. China has so far rejected all accusations of dumping, arguing instead that its subsidisation is limited to industrial policy practices that are common in other countries.