EU Tariffs on China Not a ‘Punishment’, Says German Economy Minister

Flags of European Union and China are pictured during the China-EU summit at the Great Hall of the People in Beijing, China, July 12, 2016. (Reuters)
Flags of European Union and China are pictured during the China-EU summit at the Great Hall of the People in Beijing, China, July 12, 2016. (Reuters)
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EU Tariffs on China Not a ‘Punishment’, Says German Economy Minister

Flags of European Union and China are pictured during the China-EU summit at the Great Hall of the People in Beijing, China, July 12, 2016. (Reuters)
Flags of European Union and China are pictured during the China-EU summit at the Great Hall of the People in Beijing, China, July 12, 2016. (Reuters)

Proposed European Union tariffs on Chinese goods are not a "punishment", Germany's Economy Minister Robert Habeck told Chinese officials in Beijing on Saturday.

Habeck's visit to China is the first by a senior European official since Brussels proposed hefty duties on imports of Chinese-made electric vehicles (EVs) to combat what the EU considers excessive subsidies.

China warned on Friday ahead of his arrival that escalating frictions with the EU over EVs could trigger a trade war.

"It is important to understand that these are not punitive tariffs," Habeck said in the first plenary session of a climate and transformation dialogue.

Countries such as the US, Brazil and Türkiye have used punitive tariffs, but not the EU, the economy minister said. "Europe does things differently."

Habeck said that for nine months, the European Commission had examined in great detail whether Chinese companies had benefited unfairly from subsidies.

Any countervailing duty measure that results from the EU review "is not a punishment", he said, adding that such measures are meant to compensate for the advantages granted to Chinese companies by Beijing.

Meeting Zheng Shanjie, chairman of China's National Development and Reform Commission, Habeck said the proposed EU tariffs were intended to level the playing field with China.

Zheng responded: "We will do everything to protect Chinese companies."



British Assets Gain, Mid-cap Stocks Lead after Labour Election Win

A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
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British Assets Gain, Mid-cap Stocks Lead after Labour Election Win

A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights

British domestic-focussed mid-cap stocks were the biggest gainers on Friday after the centre-left Labour Party surged to a comprehensive win in a parliamentary election with blue chip stocks, government bond prices and the pound higher.

Hopes that the incoming government will provide a period of economic stability after an often tumultuous 14 years of Conservative Party rule sent the FTSE 250 midcap index (.FTMC), up as much as 1.8% in early trading to its highest since April 2022.

The blue chip FTSE 100 index (.FTSE), was last up 0.2% and the yield on 10-year British government bonds or gilts, dropped 3 basis points to 4.17%, marginally better than other European markets, Reuters reported.

Labour won a massive majority in the 650-seat parliament while Rishi Sunak's Conservatives suffered the worst defeat in the party's long history as voters punished them for a cost of living crisis, failing public services, and a series of scandals.

"A landslide victory provides the sort of clarity and stability that equity markets need in an increasingly volatile world," said Ben Ritchie, head of developed market equities at abrdn.

"If the new government gets this right, businesses with significant exposure to the UK economy should be the likely winners - a shot in the arm in particular for companies in the FTSE 250 and FTSE Small Cap".

British home builders stood out, with an index tracking their shares up 2.3%.

"We think the formation of a Labour-majority government will have a positive impact on housebuilders and construction materials," said Aruna Karunathilake, portfolio manager at Fidelity.

"We expect Labour to reinstate housebuilding targets and perhaps also fund investment in local planning departments... That should alleviate builders’ concerns about planning bottlenecks impeding growth in the medium term."

Analysts at Goldman Sachs said that while Labour's manifesto policies imply relatively limited changes to fiscal policy they would modestly boost demand in the near term.

As a result, they raised their forecasts for British GDP growth by 0.1 percentage points in each of 2025 and 2026.