China will not accept higher EU tariffs.

The Foreign Ministry in Beijing announced on Wednesday that it would consider all measures to resolutely defend its own interests. Special tariffs imposed by the European Union on electric cars would violate market rules. They would also be against the interests of the EU. According to a report in the Financial Times, the EU Commission will inform car manufacturers on Wednesday that it will impose special tariffs of up to 25 percent on electric vehicles from China from next month, despite warnings from the industry. The Brussels authority accuses the People's Republic of distorting competition with subsidies for electric car manufacturers.

German car manufacturers in particular are heavily dependent on sales in China - and therefore fear retaliatory measures from Beijing. The USA has already imposed punitive tariffs on Chinese e-cars and other products from the People's Republic.

The head of foreign trade at the German Chamber of Industry and Commerce, Volker Treier, said that the EU Commission's looming decision would not be without consequences for the heavily export-oriented German economy. "While the tariffs also affect German car manufacturers in China, further trade barriers for the German economy are on the horizon with the countermeasures already announced by China. The EU must be careful not to get caught between the geopolitical mills of its two most important trading partners." It is true that distortions of competition are a problem that Europe should tackle. "However, the best answer is to create its own good location conditions and strive for open markets and competition, for example through a comprehensive reduction in bureaucracy and through new trade agreements that noticeably improve market access in the Indo-Pacific and Latin America, for example. Further trade conflicts must be avoided, as must greater isolationism in Europe."

(Report by Liz Lee and Christian Krämer, edited by Christian Götz. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)