German Economy Minister Robert Habeck called for a political solution to the dispute between the European Union and China over tariffs on electric cars on Tuesday after meeting with his Chinese counterpart Wang Wentao, Reuters reported.

“We want to avoid at all costs a trade conflict with spiraling tariff increases that ultimately harms both sides,” Habeck said in a statement. - My position is, therefore, clear: we need a political solution.”

The European Commission previously confirmed that high tariffs will be imposed on Chinese battery electric vehicles (BEVs) starting July 5. This momentous decision has the potential to change Brussels' relationship with Beijing and trigger retaliatory measures against European manufacturers.

The move, announced in early June, was the result of an in-depth investigation that found that subsidies were being injected into the entire supply chain of BEVs produced in China by both domestic and foreign companies. 

The scale of the subsidies allows Chinese manufacturers to offer their electric cars at markedly lower prices than those assembled in the bloc's countries, where energy and labor costs are much higher. The price gap has caused imports of Chinese BEVs to skyrocket: from 3.9 percent market share in 2020 to 25 percent at the end of 2023, according to the European Commission.

This wave of cheap imports poses a “threat of economic damage” to EU competitors, which could lead to large losses and risk the loss of up to 12 million jobs, the executive body warned.