EU tariffs on China not a punishment, says German minister

Beijing wants the European Union to scrap its preliminary tariffs on Chinese electric vehicles by July 4. - AFP

BEIJING: Proposed European Union (EU) tariffs on Chinese goods are not a “punishment”, says Germany’s Economy Minister Robert Habeck.

Habeck said this on a first visit to China by a senior European official since Brussels proposed hefty duties on imports of Chinese-made electric vehicles (EVs) to combat what the EU considers excessive subsidies.

China warned last Friday, ahead of his arrival, that escalating frictions with the EU over EVs could trigger a trade war.

“It is important to understand that these are not punitive tariffs,” Habeck said in the first plenary session of a climate and transformation dialogue.

Habeck said that for nine months, the European Commission had examined in great detail whether Chinese companies had benefitted unfairly from subsidies.

Any countervailing duty measure that results from the EU review “is not a punishment”, he said, and added that such measures were meant to compensate for the advantages granted to Chinese companies.

“Common, equal standards for market access should be achieved,” Habeck said.

Meeting Zheng Shanjie, chairman of China’s National Development and Reform Commission, Habeck said the proposed EU tariffs were intended to level the playing field with China.

Zheng responded: “We will do everything to protect Chinese companies.”

Proposed EU import duties on Chinese-made EVs would hurt both sides, Zheng added. He told Habeck he hoped Germany would demonstrate leadership within the EU and “do the correct thing”.

He also denied the accusations of unfair subsidies, and said that the development of China’s new energy industry was the result of comprehensive advantages in technology, market and industry chains, fostered in fierce competition.

The industry growth “is the result of competition, rather than subsidies, let alone unfair competition,” Zheng said during the meeting.

The EU provisional duties are set to apply by July 4, with the investigation set to continue until Nov 2, when definitive duties, typically for five years, could be imposed.

Habeck told Chinese officials the conclusions of the EU report should be discussed.

“It’s important now to take the opportunity that the report provides seriously and to talk or negotiate,” Habeck said.

After his meeting with Zheng, Habeck spoke with Chinese Commerce Minister Wang Wentao, who said he would discuss the tariffs with EU Commissioner Valdis Dombrovskis.

Although the trade tensions were discussed, the goal of the meeting was to deepen cooperation between both industrialised nations for the green transition.

This was the first plenary session of the climate and transformation dialogue after Germany and China signed a memorandum of understanding in June of last year for cooperation on climate change and the green transition.

The countries acknowledged they had a special responsibility to prevent global warming of 1.5 degrees Celsius above pre-industrial temperatures, a level regarded by scientists as crucial to preventing the most severe consequences.

China installed almost 350 gigawatts of new renewable capacity in 2023, more than half the global total, and if it maintains this pace it will likely exceed its 2030 target this year, a report published in June by the International Energy Agency showed. — Reuters

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