"Don't expect too much of me during this visit to China"

[Text/Observer Yang Rong]

According to the comprehensive German news agency and Reuters on June 21, before leaving for the next stop in China, German Deputy Prime Minister and Minister of Economy and Climate Protection Robert Habak said in South Korea that he did not expect this visit to China to solve the tension between China and the EU after the EU announced its intention to impose tariffs on Chinese electric vehicles.

Habak visited the Panmunjom joint security area on the Korean border on the same day, and will fly to Beijing later to meet with EU ambassadors and Chinese officials. When talking about the landing of EU tariff boots to China, he said that he hoped that his trip could contribute, but he tried to reduce the expectations of the outside world.

Bloomberg said that before his visit to China, Habak recognized that Germany, as one of the major economies in Europe and the largest auto producer, was in a "special situation" in the current trade tensions. "I am determined to encourage the Chinese side to discuss this issue with us, instead of letting things escalate."

"I hope that in the near future, (between Europe and China) can establish a solution oriented model. If I can contribute to this, it would be great," Habak said.

However, he said at the same time, "the omens now show that this is quite challenging". Habak said that it is the task of the European Commission to negotiate tariff issues with China. "Therefore, the possibility of conflict resolution during my stay in China can be ruled out, and I cannot negotiate on behalf of the EU.". He added that at present, he "does not see any major opportunities".

On June 21, Habak delivered a speech in Seoul, South Korea (Visual China)

According to the information previously released by the German side, Habak will visit China from June 21 to 23, including Beijing, Shanghai and Hangzhou. Before leaving, Habak said in Berlin: "China is an indispensable partner for (Germany) to cope with global challenges such as climate change... At the same time, for many German enterprises, China's significance as a production base, innovation center, and procurement and sales market is increasing."

Just a week before Habak's Asian trip, the European Commission released the preliminary findings of the anti subsidy investigation on electric vehicles in China, and proposed to impose temporary countervailing duties ranging from 17.4% to 38.1% on electric vehicles imported from China. If the EU cannot reach a solution through negotiation with China, the measure of levying additional tariffs will take effect from July 4.

This was strongly opposed by German car companies. In 2023, nearly one-third of the sales of German automobile manufacturers will come from China, which is also the largest single market of the three German automobile manufacturers Volkswagen, BMW and Mercedes Benz. The President of the German Automobile Industry Association (VDA) Hildegard Muller said: "This measure further increases the risk of global trade conflicts... The potential damage caused by relevant measures may be greater than the potential benefits to Europe, especially to the German automobile industry."

From the perspective of China's automobile exports, Germany and Slovakia are most vulnerable to any potential EU tariff (Bloomberg)

It is reported that the German government is also critical of the EU's decision to impose tariffs on Chinese electric vehicles. In the ruling coalition, in addition to the support expressed by Foreign Minister Berber last month, Habak, Prime Minister of the Social Democratic Party Scholtz and Finance Minister of the Liberal Democratic Party Lindner are worried that the trade dispute with China will further damage the German economy. The German economy has been hit hard by the conflict between Russia and Ukraine. According to the economic forecast released by the International Monetary Fund (IMF) in April, Germany's economic growth rate in 2024 may be lower than that of Japan, ranking the bottom of the G7.

Bloomberg pointed out that Habak is a pro business faction within the German Green Party, and has always opposed protectionist measures and supported free trade. After the European Commission announced its intention to impose tariffs, Habak immediately called for negotiations with China, warning that "tariffs are always the last and worst means". The German Ministry of Economy has said that Habek will not directly participate in tariff negotiations, but will promote "fairer terms of trade" in the meeting with Chinese officials.

Reuters previously observed that after the EU announced that it would impose high tariffs on China's electric vehicles, the Shultz government was promoting a "friendly" solution. A spokesman of the German Ministry of Economy said at a regular press conference on the 14th that the EU must find a solution that conforms to the norms of the World Trade Organization. Bloomberg quoted insiders on the same day that the German government is trying to prevent tariffs, and even if it cannot completely prevent them, it also hopes to relax tariff conditions as much as possible.

German Minister of Digitalization and Transport Volcker Weising will also visit China next week. He is one of the leaders firmly opposed to tariffs. Weixin recently said that tariffs would be "a disaster" for Germany and would not benefit the EU. "Nobody wants to fight a trade war with China".

This also echoes the views of German enterprises in China. Maximilian Butek, executive director and member of the board of directors of the East and Central China regions of the German Chamber of Commerce in China, said recently that the EU's "tariff stick" can neither protect German automobile manufacturers nor improve their competitiveness.

"If you implement these (tariffs) to protect the industry, but the industry says that they do not want this protection, then what is the purpose now?" Ma Mingbo said at a press conference on the 14th, "Just as we need to keep the Chinese market open, we also want to keep the European market open."

On June 12, the spokesman of the Ministry of Commerce of China responded to the EU's imposition of tariffs on China's electric vehicles that the European side had ignored the facts and WTO rules, ignored China's repeated strong opposition, and ignored the appeals and dissuasions of the governments and industry circles of several EU member states. China was highly concerned about this and strongly dissatisfied with it. The Chinese industry was deeply disappointed Strongly oppose.

On whether China will oppose the EU's imposition of tariffs on China's electric vehicles, Chinese Foreign Ministry spokesman Lin Jian said at a regular press conference on June 13 that China has principles to defend, that is, WTO rules and market principles, as well as interests to safeguard, that is, the legitimate rights and interests of China's electric vehicle industry and enterprises. To this end, China will resolutely take all necessary measures.

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