In the fight against the increasing dominance of China’s economy, the Institute of German Economics (IW) Cologne advises the German government to introduce so‑called “compensation tariffs”.
“We need tariffs as a way to offset unfair competition that China carries out with great shamelessness” said trade economist Jürgen Matthes of the IW to the “Redaktionsnetzwerk Deutschland”. He added that these tariffs do not have to be punitive; they do not automatically represent protectionism, even though that perception is ingrained in our education system.
“Collecting tariffs is not a major problem-we already have well‑established processes for that. We simply need to determine, for different sectors and product portfolios, how much of the unfair competition comes from subsidies and currency undervaluation” Matthes explained.
“The compensation tariffs should, of course, only be levied where we have considerable domestic production that would remain viable in a world without subsidies-take the machinery sector, for example. And we need to act on these tariffs quickly”.
