China warns that escalating trade tensions with the EU over electric vehicle tariffs could lead to a ‘trade war’. German Economy Minister Robert Habeck visits Beijing amid the growing conflict.

Beijing cautioned on Friday that rising frictions with the European Union over electric vehicle (EV) imports might trigger a trade war. This warning came as Germany's economy minister, Robert Habeck, arrived in China for a three-day visit, with the proposed tariffs high on his agenda.

German Economy Minister Robert Habeck

The tension follows the European Union's proposal to impose substantial duties on Chinese-made EVs, aiming to counteract what it views as excessive subsidies. In retaliation, China has threatened to hike tariffs on European gasoline-powered cars and launched a dumping investigation into EU pork imports. "The European side continues to escalate trade frictions and could trigger a 'trade war'," stated a spokesperson from the Chinese commerce ministry. "The responsibility lies entirely with the European side."

Habeck, representing Germany's Greens Party, criticized Berlin's current China strategy as outdated and not aligned with the broader EU approach. His visit highlights the growing unease within the EU regarding China's trade practices and the potential economic repercussions.

Drawing parallels to the past US-China trade war, this conflict could significantly impact global trade dynamics, including the feed and grain markets. The US-China trade war saw tariffs affecting agricultural exports, disrupting global supply chains and causing price volatility.