Wednesday, May 29, 2024

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German Finance Minister Scholz cautions against protectionist measures in China’s investigation of electric car market.


Olaf Scholz, the Chancellor of Germany, expressed doubt about the EU’s investigation into possible unlawful support for Chinese electric cars. He believes that Europe should not resort to protectionism and instead should embrace worldwide rivalry.

During a panel discussion at the Berlin Global Dialogue on Thursday, Scholz expressed his preference for an economic model that promotes global competition. He also cautioned against adopting a protectionist approach.

The European Commission has initiated a trade inquiry, supported by France, regarding China’s assistance to domestic businesses. However, there are worries that this investigation and the potential imposition of anti-subsidy tariffs could escalate into a larger trade conflict with China. This could pose a risk for German companies such as Volkswagen, Mercedes, and BASF, which have significant investments in China.

When questioned about the potential danger of a trade war, Scholz stated, “It is clear that this will not occur.”

Last week, German Economy Minister Robert Habeck expressed concerns that German car manufacturers fear potential retaliation if the EU were to impose tariffs on Chinese electric cars.

Attempting to minimize the issue of state-supported Chinese car imports, Scholz remarked on Thursday, “I recall the widespread discussions that arose when Japanese cars entered the German market. Now, they are integrated into the market – with German cars in Japan and Japanese cars in Germany. What is the concern?”

The chancellor stated that this also holds true for Korean brands.

Disregarding the significant financial assistance from China, which has helped establish itself as a leading producer of batteries, Scholz’s opinion aligns with the sentiments of the German auto industry, as major brands have a significant presence in the Chinese market.

“We aim to distribute our cars in Europe, North America, Japan, China, Africa, and South America,” stated Scholz. “However, this also entails welcoming cars from other countries to the German market.”