In the effort to counter the growing dominance of the Chinese economy, the Institute for German Economic Research (IW) in Cologne is urging the German federal government to introduce “offset tariffs”.
Jürgen Matthes, a trade economist at the IW and head of its cluster on international economic policy, told the Redaktionsnetzwerk Deutschland that Germany needs tariffs to counter the unfair competition that China “practices with great shamelessness”. He stressed that these tariffs should not automatically be punitive. “Tariffs aren’t inherently protectionist, even though that’s how we’ve been taught in Germany” Matthes explained.
According to Matthes, levying tariffs isn’t a technical challenge- “there are well‑established procedures”. What is essential is to calculate, for each sector and product group, the extent to which subsidies and currency underrating drive unfair competition. “Offset tariffs should only apply where we have substantial domestic production that remains viable without subsidies-take the machinery‑manufacturing sector, for example”. He added that these measures are needed urgently.