German Chancellor Olaf Scholz poured cold water on the European Union’s anti-subsidy investigation into Chinese electric vehicles, warning against taking protectionist actions that could harm domestic industries.
“We want to sell our cars but that means we are also open to receive cars from other countries,” Scholz said Thursday in a discussion with Bloomberg’s Stephanie Flanders at the Berlin Global Dialogue forum. “Now there are German cars in Korea, and Korean cars in Germany — what is the problem?”
Germany stands to be the country most affected in the EU in the event of a tit-for-tat tariff dispute with China. If levies are imposed, Beijing’s most powerful response would be to restrict access to its vast market — something that would hit German automakers hardest as they sold 4.6 million cars there last year.
The government in China initially reacted aggressively to the announcement this month by European Commission President Ursula von der Leyen that the EU will investigate Chinese EV subsidies, calling it “a naked act of protectionism.”
That stoked concerns about a potential trade war but those fears eased after a subsequent visit to China by EU Trade Commissioner Valdis Dombrovskis.
President Xi Jinping’s government avoided the kind of rhetoric that could endanger an economic relationship worth $900 billion, while Vice Premier He Lifeng agreed to set up several working groups, including on financial services and trade.
“We want to sell our cars in in Europe, in North America, in Japan, in China, in Africa, in South America, in all the places,” Scholz said in his first comments on the bloc’s investigation. “But this means that we are also open to get the cars from other countries on the German market.”
