Trade and politics warn the EU against imitating higher US tariffs

As of: May 15, 2024 9:00 a.m

The US’s higher tariffs on Chinese imports must not be a role model for the EU, warns the foreign trade association. Transport Minister Wissing also expressed concern about a trade war. China threatens the USA with countermeasures.

After the USA announced that it would increase tariffs on numerous imports from China, some of them drastically, the foreign trade association BGA is warning against taking similar steps in the EU. The higher tariffs affect, among other things, electric cars from China – they are set to rise from the current 25 to 100 percent.

Dirk Jandura, President of the BGA (Federal Association of Wholesale, Foreign Trade, Services), described the US tariff increase and its effect as “highly doubtful”. From the BGA President’s point of view, possible countermeasures by China in particular could have a negative impact on the European market. In the end, everything would become more expensive and the losers would be consumers and companies, Jandura warned in the Germany editorial network.

The German automotive industry in particular would suffer because “there is not a single car in the EU without parts from China.” “Our manufacturers also import their electric models from China. So we would be hurting ourselves,” emphasized Jandura.

Jandura sees the tough course of the USA against the background of the election campaign there. The government under US President Joe Biden seems to want to “set a populist signal in order to protect industrial jobs in the USA in particular”.

USA accuses China of unfair competition

In fact, the US government justified the higher tariffs with unfair competition practices by China. China would unfairly subsidize its own manufacturers so that they could flood the international market with their own models. This distorts international competition. At the same time, the USA had emphasized that it was striving for a stable relationship with China.

Overall, the rising US tariffs affect imports from China worth $18 billion. In addition to electric cars, higher import fees will also be charged in the future on products such as solar cells, semiconductors, harbor cranes and medical supplies.

China demands reversal of US “wrong practices”.

The Chinese Ministry of Commerce called on the US to immediately correct its wrong practices. The People’s Republic will take decisive measures to defend its rights and interests.

From China’s perspective, the higher US tariffs are motivated by domestic politics. Economic and trade issues are being exploited. The tariff increase is above all a symbolic gesture with which the Biden government is trying to appear tough against China in the increasingly tough election campaign.

Wissing against “trade war through punitive tariffs”

Federal Transport Minister Volker Wissing warned the EU in the Augsburger Allgemeine against following the example of the USA. “Starting a trade war through punitive tariffs is the wrong approach,” warned the FDP politician. Instead, the goal must be “international trade with fair and uniform competition rules”. Wissing sees the domestic industry as being prepared for this: “Our companies produce top products for the whole world, and it should stay that way in the future.”

Previously, Chancellor Olaf Scholz had not commented directly on the possibility of higher EU tariffs on Chinese products. However, he had pointed out that “currently 50 percent of imports of electric vehicles from China come from Western brands that produce there themselves and import them to Europe.” In addition, many European manufacturers successfully sold their vehicles on the Chinese market. Sweden’s Prime Minister Ulf Kristersson also spoke out against “punitive tariffs as a panacea”.

The EU Commission itself has so far remained tight-lipped about whether the US’s stricter course could have consequences for the EU. A spokesman for the EU body said the authority is taking note of the Americans’ decision and is examining what effects it could have on the EU.

Benjamin Eyssel, ARD Beijing, tagesschau, May 15, 2024 7:59 a.m

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