German Chancellor Olaf Scholz has warned against cutting the German economy off from potential markets abroad, against the backdrop of a debate on punitive tariffs for Chinese products.
"Protectionism only makes everything more expensive in the end," he said on Wednesday at the Chamber of Commerce and Industry conference in Berlin.
"What we need is fair and free global trade," he said.
The US government announced on Tuesday that it would raise the existing tariffs on electric cars and other products from China from 25% to 100%. The United States justified its decision by saying that Beijing distorts competition through substantial state subsidies.
Scholz told the conference that free global trade is particularly important for the German economy, which has faced unprecedented challenges since the Russian attack on Ukraine.
The Federation of German Industries (BDI) warned of the potential impact of the US tariff increase on German markets. Board member Wolfgang Niedermark argued at the conference that "Germany and the EU should now be careful to ensure that the EU internal market does not become a buffer for Chinese overcapacity."
However, according to a simulation by the Kiel Institute for the World Economy (IfW) released on Wednesday, the higher US tariffs will have little impact on trade between the EU and China.
