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China has agreed to hold talks with the EU over its decision to impose higher tariffs on imports of Chinese electric vehicles, during a visit to Beijing by Germany’s vice chancellor aimed at easing tensions.
Robert Habeck, Minister for Economy and Climate Action, welcomed China’s move to engage with Brussels on EU tariffs, but said it was “a first step and many more will be needed”.
His comments came after China’s Commerce Ministry said Beijing and Brussels had agreed to start consultations on an anti-subsidy investigation the EU launched last year. The investigation led to a decision this month to increase tariffs on Chinese electric vehicles by up to 48 percent.
The announcement followed a video conference between Chinese Trade Minister Wang Wentao and EU Executive Vice President and Trade Commissioner Valdis Dombrovskis.
Germany has been critical of the EU’s decision to raise tariffs on imports of Chinese electric vehicles and Habeck is the first senior European politician to visit the country since the extra duties were announced.
The Chinese market is crucial to Germany’s huge car industry, making Berlin particularly vulnerable to any retaliation from Beijing, which has already announced its own anti-dumping investigation into EU pork products.
While striking a conciliatory tone on the tariffs, which have yet to be finalized, Habeck was critical of China’s growing exports to Russia and cited Germany’s efforts to halt exports of dual-use goods with potential military applications.
“I looked at the trade figures and China’s trade with Russia increased by more than 40 percent last year,” he said. “Energy is of course a high component [of] but about half of them concern dual-use goods.”
“Technically, these are items that can be used on the battlefield and this has to stop,” he said.
China is one of Germany’s largest trading partners and Berlin has tried to carefully manage rising tensions between Beijing and Washington, which have increased sharply after Russia’s 2022 invasion of Ukraine.
Habeck also visited Beijing, where he met Wang Wentao and Zheng Shenjie, head of the National Development and Reform Commission. He said they spoke with Chinese officials about energy and climate issues and human rights as part of “intense discussions.” An expected meeting with Prime Minister Li Qiang did not materialize.
On Sunday, Germany’s vice chancellor said China must find a safe alternative to coal after the country ramped up production of the carbon-intensive fuel source. “Without China, it would not be possible to achieve global climate goals,” he said during a visit to Hangzhou, according to a Reuters report.
President Joe Biden has imposed 100 percent tariffs on Chinese electric vehicles this year, higher than the EU, even though the US imports much smaller volumes.
Olaf Scholz, the German Chancellor, met with President Xi Jinping in April and encouraged the Chinese president to pressure Russia to end its campaign in Ukraine. Scholz has also called on Li to ensure better market access for German companies on the mainland.
Xi and his Russian counterpart Vladimir Putin have trumpeted their close relationship and vowed to increase trade. Russia became China’s fifth largest trading partner last year, up from ninth in 2020, when trade reached $240 billion. According to official data, Chinese exports to Russia rose 46.9 percent year-on-year in 2023.