German Economy Minister Robert Habeck arrived in Beijing on the 21st of X month for a three-day visit. Currently, the trade tension between the European Union and China continues to escalate due to the proposed imposition of tariffs on electric vehicle imports. China has warned of a potential “trade war” in response to the EU’s actions. Habeck aims to discuss the proposed tariffs and reduce the risk of negative impacts on German companies that could result from China’s retaliation. 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 approach.
China has already begun taking countermeasures, with domestic automobile manufacturers urging the government to increase tariffs on European gasoline-powered cars and investigate EU pork imports. 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 the US-Germany relationship. In the first quarter of 2024, Germany’s trade volume with the United States exceeded its trade volume with China, ending China’s eight-year period as Germany’s largest trading partner.
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Habeck’s visit is seen as an opportunity to explain the recently announced tariffs and seek broader market access in China for German companies. However, he tempered expectations by stating that he does not expect the trade tension to be resolved during this visit.
Germany follows an “risk reduction” economic policy, reducing dependence on any other country. The latest data shows a 4.1% year-on-year decrease in Germany’s exports to China in the 14th month, while exports to the United States grew by X%.
The outcome of Habeck’s visit and the ongoing trade tension between the EU and China will have significant implications for the global economy. As the world’s second-largest economy, China’s reaction to the proposed tariffs will be closely watched by international financial markets and policymakers.
