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Xi Jinping, during a bilateral meeting with Olaf Scholz on the sidelines of the G20 in Rio de Janeiro, he invited the German Chancellor to play a role as mediator between China and the European Union to address the issue of tariffs on electric cars. The Chinese president underlined China’s willingness to collaborate with Germany to strengthen the global strategic partnership, hoping that the problem will be resolved as soon as possible through dialogue and negotiations.
Germany’s help
“It is hoped that the Germania is ready to actively engage in this direction,” Xi said, as reported by the Xinhua agency. Germany, in fact, is among the countries most affected by the restrictive measures adopted by Beijing in response to European tariffs.
The issue emerged in October, when the European Commission announced the introduction of additional duties on the import of electric cars produced by Chinese brands. Beijing responded with restrictive measures, kicking off a new phase of dialogue between the European Union and China. Intensive discussions on tariffs took place in the first week of November, with progress towards a possible agreement on import prices, according to the European Commission. Among the topics covered, the hypothesis of establishing a minimum import price for Chinese vehicles and the adoption of tools to monitor and ensure compliance with this commitment by Chinese companies.
Xi Jinping has confidence in Germany’s mediation role, considering that Berlin had opposed the increase in duties on Chinese cars. Significantly, in 2023, the value of German car exports to China exceeded that of imports from China by three times. The most heated criticism of Brussels’ decisions came from the German car manufacturers, with Volkswagen at the forefront. The automotive giant is facing the most serious crisis in its history, also aggravated by the strategic choice to transfer know-how and skills to China to reduce costs.
But an agreement is reached on prices
Despite the introduction of definitive tariffs on Chinese electric cars, the European Commission and the Beijing government have continued to talk in the hope of reaching an agreement that would allow tariffs to be significantly reduced or completely eliminated.
China and the European Union have reached a so-called “technical consensus” in the talks, according to Chinese state broadcaster China Central Television on its Weibo account. Although this is not a definitive agreement, it represents a small step forward in the negotiations, confirming the parties’ intention to continue discussions.
The “technical consensus” would focus on the “price commitments” a complex mechanism designed to control export prices and volumes, thus avoiding the application of customs tariffs. According to China Central Television, the consensus concerns some specific agreements on the overall framework that emerged in this round of negotiations. This demonstrates the willingness of both parties to focus on core interests and work together to achieve a common goal.
What potential challenges might arise in achieving a technical consensus on electric vehicle standards between China and the EU?
Thank you for joining us today. Could you introduce yourselves and provide us with your expertise on the topic of trade relations between China and the European Union?
Guest 1: Thank you for having me! I am Dr. Liu Tianran, a professor of International Relations at Peking University specializing in China-Europe relations. I have been closely following the recent developments in the bilateral trade between China and the EU, particularly in the automotive sector.
Guest 2: Glad to be here. I am Dr. Michael Meyer, an economist at the German Institute for Economic Research and a former advisor to the German government on international trade issues. I have been monitoring the impact of the EU’s tariffs on Chinese electric cars and its effect on the German car industry.
Interviewer: Thank you both for joining us today. Let’s dive right in. The article mentions a meeting between Chinese President Xi Jinping and German Chancellor Olaf Scholz, where President Xi invited Germany to mediate in the ongoing discussions about tariffs on electric cars. What are your thoughts on this invitation?
Guest 1: It’s an interesting move by President Xi, as Germany has been one of the most vocal critics of the EU’s tariffs on Chinese electric cars. The Chinese president’s confidence in Germany’s mediation role could be due to Germany’s experience in negotiating with the EU, as well as its strong economic ties with China. Germany has been an important partner for China in various sectors, including the automotive industry, and the country could potentially use its influence to advocate for Beijing’s interests in the ongoing negotiations.
Guest 2: Yes, I agree. Germany has a lot at stake in this issue, especially with its car manufacturers feeling the pressure from increased tariffs. However, as a mediator, Germany would have to balance its own interests with those of the EU. It remains to be seen how effective Germany’s role would be in negotiating with the EU on behalf of China. Nevertheless, it is a positive sign that both sides are committed to finding a solution through dialogue and negotiations.
Interviewer: Moving on, the article mentions that China and the EU are in discussions to establish a “technical consensus”
