China’s government warned on Friday that escalating tensions with the European Union over electric vehicle imports could spark a trade war, as Germany’s economy minister arrived in the Chinese capital with proposed tariffs at the top of his agenda.
Robert Harbeck’s three-day visit to China is the first by a senior European official since the EU proposed imposing steep tariffs on imports of Chinese-made electric cars to tackle excessive subsidies, a proposal that drew countermeasures from China and sharp criticism from Chinese leaders.
Just this week, Chinese automakers urged Beijing to raise tariffs on imports of gasoline-powered vehicles from Europe, and the government launched an anti-dumping investigation into EU pork imports in retaliation for the European Commission’s move.
“The responsibility lies entirely with the EU,” a spokesman for China’s Ministry of Commerce said in a statement.
“In its countervailing duty investigations, the Europeans have intimidated and coerced Chinese companies, threatened to apply punitive high tariffs and demanded overly extensive information,” it added.
Harbeck’s visit is seen as an opportunity for Europe’s largest economy to explain the recent tariff announcements to Chinese authorities and reduce the risk of retaliatory measures from China that could hurt German companies.
Germany’s voice is particularly important, with the country’s major automakers vocally opposing the EU tariffs. The German government is encouraging dialogue but hoping China will compromise.
Domestic automakers will be most exposed to a backlash from China because nearly a third of their sales last year came from the country’s $18.6 trillion economy.
The EU’s EV tariffs have caused trade ties with the world’s second-largest economy to fall to a new low.
But Chinese state media portrayed the visit as an opportunity to ease tensions, with some experts saying Germany should seek an agreement, state-run tabloid Global Times reported on Friday.
New low
After arriving in Beijing, Harbeck will meet with several EU ambassadors and then meet with Premier Li Qiang and other government officials.
Before traveling to Shanghai and Hangzhou, Xi is also due to meet with Minister of Industry Jin Zhuanglong and Minister of Commerce Wang Wentao.
On Friday, Trump tempered expectations about what would be resolved during the trip, saying he wasn’t expecting a resolution to the trade dispute.
Germany also wants to give its companies greater access to China’s vast market and “reduce the risks” of its economy becoming overly dependent on any one country.
Trade experts say economic and political factors are all increasingly favorable to U.S.-German relations.
Germany’s trade with China will be worth 60 billion euros ($64 billion) in the first quarter of 2024, below the 63 billion euros of total trade between Germany and the United States, breaking an eight-year trend in which China had been Germany’s largest trading partner.
Official figures released on Friday underscored the shift: German exports to China fell 14 percent in May from a year earlier, while exports to the United States rose 4.1 percent.
