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BYD cars are waiting to be shipped in the port of Suzhou: Wissing warns of isolation

Photo: AFP

In the dispute over possible protective tariffs on Chinese electric cars, German Transport Minister Volker Wissing has positioned himself against EU Commission President Ursula von der Leyen – and warned of damage to the German economy.

"In principle, I don't think much of building market barriers," the FDP politician told the Augsburger Allgemeine. A trade war with Beijing could quickly spread to other industries and cause massive damage to the German economy, Wissing warned.

Von der Leyen recently accused China of subsidizing its automakers, who are increasingly offering their products on the European market. "We have not forgotten how China's unfair trade practices have affected our solar industry," the CDU politician told the EU Parliament. The Commission President also launched a competition inquiry into state support for electric cars from China. "The price of these cars is artificially depressed by huge government subsidies – this distorts our market," von der Leyen criticised during her State of the EU address.

China angered by EU investigation

If the suspicion that Beijing is supporting Chinese manufacturers with unfair practices is confirmed, protective tariffs or other barriers for Chinese cars could be the result.

Wissing considers this approach to be dangerous. Isolationist policies lead to a chain reaction, he said. "We have to make sure that we produce our electric vehicles competitively – for Germany and for the world markets (...). Today the cars will be sealed off, tomorrow the chemical products, and every single step in itself makes the world poorer," warned the minister in the "Augsburger Allgemeine".

Previously, German carmakers had already expressed skepticism about possible European retaliatory measures. Bosch CEO Stefan Hartung told SPIEGEL: "A race for punitive tariffs would only have losers." China had reacted angrily to von der Leyen's announcement of an investigation. The competitive advantage of Chinese manufacturers is "acquired through hard work" and "the result of continuous technological innovation," said the Ministry of Commerce in Beijing.