German Economy Minister Robert Habeck arrived in Beijing on January 21st for a three-day visit. The escalating trade tensions between the European Union and China over proposed tariffs on electric vehicle imports have led to potential “trade wars”. Habeck aims to discuss the proposed tariffs and minimize the negative impact they may have on German companies. The major German automobile manufacturers strongly oppose the EU tariffs, highlighting Germany’s important role in these discussions.
Surprisingly, the minister criticized the strategic document on China released by Germany 11 months ago, calling it “short-term” and advocating for a more future-oriented and unified European policy.
China has already begun taking retaliatory measures, with domestic automobile manufacturers urging the government to increase tariffs on European gasoline-powered vehicles and investigate pork imports from the EU. A spokesperson for China’s Ministry of Commerce accused Germany of escalating the situation and warned that further actions could trigger a trade war.
Economic and political factors are increasingly favoring US-German relations. In the first quarter of 2024, Germany’s trade with the United States exceeded its trade with China, ending China’s eight-year period as Germany’s largest trading partner.
Habeck’s visit is seen as an opportunity to explain the recently announced tariffs and seek broader market access for German companies in China. However, he tempered expectations by stating that he does not expect the trade tensions to be resolved during this visit.
Germany pursues an “risk reduction” economy, reducing dependence on any other country. The latest data shows that German exports to China decreased by 4.1% year-on-year in the 14th month, while exports to the United States grew by XNUMX%.
The outcome of Habeck’s visit and the ongoing trade tensions between the EU and China will have a significant impact on the global economy. As the world’s second-largest economy, China’s response to the proposed tariffs will be closely watched by international financial markets and policymakers.