German Finance Minister Olaf Scholz has expressed skepticism towards the European Commission’s investigation into electric vehicles (EVs) from China. In his first comments on the probe, Scholz cautioned against protectionist measures that could harm domestic industries. He emphasized the importance of selling German cars in various global markets, including China, while also remaining open to importing cars from other countries. Scholz pointed out that German cars are already being sold in Korea, and Korean cars in Germany, questioning the need for restrictions.
Germany is particularly vulnerable in the event of a tariff dispute with China, as it sold 4.6 million cars in the Chinese market last year. If China were to impose levies, it could severely impact German carmakers such as Volkswagen and BMW. Initially, China reacted strongly to the European Commission’s announcement, labeling it a “naked act of protectionism.” However, tensions eased after a visit to China by the EU’s Valdis Dombrovskis, and Chinese President Xi Jinping’s government has avoided escalating the situation.
Charles Michel, the president of the European Council, also emphasized the EU’s desire to avoid a trade war with China. Instead, the focus is on rebalancing the relationship to reduce excessive reliance on one country. Michel stated that Europe aims to address critical vulnerabilities and reduce dependency on any single nation. The EU’s investigation into Chinese EVs is part of this broader effort.
It remains to be seen how the European Commission will proceed with its probe into Chinese EVs. The comments from German Finance Minister Olaf Scholz indicate a cautious approach, emphasizing the importance of global trade while seeking to protect domestic industries. As tensions between the EU and China continue to simmer, finding a balance between open markets and fair competition will be crucial for both sides.
