Habeck goes to China: how Germany hopes to smooth relations with Beijing

5 months ago 13

German hopes are high that Economy Minister Robert Habeck’s trip to China will help address tensions over the recently announced EU tariffs on electric vehicles (EVs).

The minister from the Greens is leaving for a trip to Korea and China on Wednesday (19 June), with talks with the Commerce Ministry in Beijing planned for Saturday.

“The timing for a trip to China could hardly be more convenient,” Sandra Detzer, the Greens’ lead MP for economic affairs in the German Bundestag, told Euractiv.

“Precisely because of the tariff disputes between Beijing and Brussels, we should now utilise all available channels of communication,” she added.

After first visiting Korea, Habeck and a delegation of business representatives and MPs will head to China on Friday. A spokesperson of the Economy Ministry confirmed to Euractiv that he’s expected to meet the Ministry of Commerce and the National Development and Reform Commission on Saturday, with trade issues on the agenda.

Another ministry spokesperson told journalists last Friday that the topics of discussion “will be geopolitical developments, bilateral economic relations, and other global challenges such as climate protection.”

The European Commission announced preliminary countervailing duties of between 17% and 38% on Chinese EVs last week. The new tariffs are officially set to kick in on 4 July unless a negotiated solution exists between the EU and China.

While the EU executive will lead official negotiations with Chinese counterparts, Germany is particularly keen on reaching a deal with China, representing the country’s fourth-largest export market.

Exports and supply chains in its car industry, in particular, would take a hit from possible retaliatory measures from China.

“China is a very important sales and procurement market for German companies. Last year, the bilateral trade volume totalled €254 billion, one-twelfth of Germany’s total trade in goods,” the ministry spokesperson said on Friday.

Immediately after the Commission’s announcement last week, Habeck called for talks with China, which his spokesperson said should be about “avoiding a spiral of tariffs”.

On Monday, China announced an anti-dumping probe into European pork. While the move prompted worries among producers, it did not represent the escalation some feared.

“If China now refers to WTO-compliant procedures for pork, this shows one thing: there seems to be a desire on both sides for rules-based world trade. This could provide a common basis for constructive talks in Beijing,” Detzer said.

The probe into pork will not directly affect Germany, as China has banned pork exports from the country since the 2020 outbreak of African swine fever—something the German government is also aiming to address in bilateral talks.

[Edited by Anna Brunetti/Alice Taylor]