BERLIN (dpa-AFX) - Against the backdrop of the debate about punitive tariffs on Chinese products, German Chancellor Olaf Scholz (SPD) has warned against sealing off markets. "Protectionism only makes everything more expensive in the end," he said on Wednesday at the IHK Day in Berlin. "What we need is fair and free global trade."

The US government announced on Tuesday that it would raise the existing special tariffs on electric cars and other products from China from 25 to 100 percent. The United States accuses Beijing of distorting competition through substantial state subsidies.

According to Scholz, open markets must not "fall by the wayside"

The Chancellor emphasized that free global trade is particularly important for the German economy, which has faced unprecedented challenges since the Russian attack on Ukraine. "And in this situation, we must ensure that the open markets do not fall by the wayside."

The Federation of German Industries (BDI) referred to the potential impact of the US tariff increase on German markets. "Germany and the EU should now be careful to ensure that the EU internal market does not become a buffer for Chinese overcapacity, which will be thwarted on the US market. Unfortunately, this has been the experience on the international steel market in recent years," commented Wolfgang Niedermark from the BDI's Executive Board. The EU must consistently apply protective instruments against goods from third countries that are offered at distorted prices due to dumping and subsidies.

IfW calculation: US tariffs have little impact on the EU

According to a simulation calculation by the Kiel Institute for the World Economy (IfW), the imposed US tariffs in themselves have hardly any impact on trade between the EU and China. "In particular, the number of electric cars imported by the USA from China is so small, only 12,000 per year, that a detour to other target markets is practically unnoticeable," the IfW reported on Wednesday. Alternative markets are therefore likely to be Canada and Mexico in particular. However, it is worrying that the tariffs could cause a very unfavorable spiral of reactions and counter-reactions for Germany and the EU, said IfW trade researcher Julian Hinz.

Accordingly, the foreign trade association BGA warned against Europe copying the US approach. "The announcement to quadruple the import duties for electric cars in the USA should be seen against the backdrop of the ever-intensifying US election campaign," said Dirk Jandura, President of the Federal Association of Wholesale, Foreign Trade and Services (BGA), to Redaktionsnetzwerk Deutschland (RND). "We reject such measures," emphasized Jandura. In the end, everything would become more expensive and the losers would be consumers and companies.

The German automotive industry would suffer the most, said Jandura: "There is not a single car in the EU without parts from China. What's more, our manufacturers import their electric models from China. We would therefore be cutting ourselves in two," emphasized the association president. "We have to embrace competition. And we must fight for a level playing field."/mfi/DP/men