While emphasizing that full protectionism should not be implemented, there is also a push for the government to strengthen measures to reduce risks for trade with China and prepare more trade defense tools. Facing competition from Chinese companies, the German industry has faced quite a complex situation recently.
According to a report by Reuters on September 25th, the German Industry Federation (BDI) called on the German government and the European Union to adopt more stringent economic policies towards China, to more firmly reduce the so-called economic risks related to China, and to promote diversification of supply chains.
BDI represents Germany's major manufacturers. In a policy document released on that day, the organization described the so-called “systemic competition” from China. Tanja Gönner, CEO of BDI, stated that “systemic competition with the Chinese economy” is increasingly challenging Germany’s open social market economy, and corresponding industrial and trade policies are necessary.
BDI advocates for a more consistent approach to so-called ‘risk reduction’, reducing dependence on a single supplier, and expanding cooperation with Germany, the European Union, and other regions based on economic and security interests.
August 22, 2026, Berggheim, North Rhine-Westphalia, Germany - Steam from RWE Energy Company's Niederosan Coal and Power Plant rose into the summer sky. IC Photo
Gerna also suggested that the EU should be equipped with tools to quickly respond to what he calls "unfair competition," including anti-dumping and countervailing measures.
However, changing the subject, BDI warned that new trade defense measures must be carefully designed to avoid turning into widespread protectionism.
This contradictory attitude, where one emphasizes free trade while simultaneously demanding stronger precautions against China, is not uncommon in the German industrial circle recently.
Just a few days ago, a large-scale protest took place in the German automotive industry. The largest industrial union in Germany, IG Metall, reported that approximately 175,000 to 180,000 employees from the automotive industry participated in the protests at over 280 locations across the country. This involved companies such as Volkswagen, Mercedes-Benz, BMW, and Bosch. The German automotive industry is undergoing major restructuring, with Volkswagen, Mercedes-Benz, BMW, and their suppliers all facing pressures to lay off employees or cut costs to varying degrees.
But in addition to pressing corporate management and the German government, some trade unionists have also targeted China. The head of Volkswagen's union proposed that the EU should impose additional tariffs on Chinese plug-in hybrid vehicles. IG Metall demanded what they call “fair trade protection” and advocated for products labeled “Made in EU”, encouraging more production and industrial chains to remain in Europe.
Similar views have emerged within the German government. Deputy Chancellor and Finance Minister Christian Schmidt stated at the Volkswagen headquarters in Wolfsburg on September 17 that the EU should take more stringent trade measures against Chinese imports of plug-in hybrid vehicles, including considering tariffs and tightening regulations regarding local content requirements for automobiles. He also said that Germany should not be too "naive" when dealing with competition from China.
German Automotive Industry Association (VDA) President Hildegard Müller also stated on the 24th that if its so-called 'unfair competition' causes market distortions, the EU can use trade defense measures. However, she admitted that isolationist and protectionist measures always carry the risk of escalating trade disputes, and such measures must be fully discussed with the affected industries.
While the German industrial and political circles have been sending signals of hostility towards China, China has recently warned Europe multiple times to avoid slipping into trade protectionism.
On September 21, Wang Yi, a member of the Political Bureau of the CPC Central Committee and Minister of Foreign Affairs, had a phone call with German Foreign Minister Weder Wohlfahrt. During the conversation, he clearly stated that China and the EU are comprehensive strategic partners, and that 'China and Germany should not engage in trade wars'. China advocates for resolving mutual concerns through dialogue and negotiation. It is hoped that Germany will maintain a rational and pragmatic attitude, play an active role within the EU, and promote the EU to adhere to free trade, abandon protectionism, and uphold open cooperation and dialogue. Wohlfahrt also expressed that Germany supports peaceful resolutions to disputes between Europe and China through dialogue.
On the same day, when meeting with Mueller, Minister of Commerce Wang Wentao also pointed out that there is a deep integration and high degree of mutual benefit between the automotive industries of China and Germany. China is not the root cause of economic and trade problems faced by the EU, but rather a partner in jointly solving these problems. The Chinese side does not wish to see the EU take a protektionist path, restrict or shut down markets, which could lead to a global market closure.
It is worth noting that Mueller also admitted that China is not only an important sales market for the German automotive industry, but also a key partner in production and innovation. He stated that “enhancing competitiveness is the way for the German automotive industry to overcome its difficulties.” He advocated for the EU to keep the automotive market open, and to avoid escalating economic and trade frictions through dialogue and consultation.
The German industry might want to listen to what Mueller said: Instead of spending more and more effort on how to prevent or block China, it’s better to improve its own competitiveness first. Trade barriers can be established, but the industries that are lost will ultimately have to be rebuilt by themselves.
