Interview: Fair competition, not protectionism, drives innovation, says German official

Technical capability, not protectionism, should determine success in international markets, said Hubert Aiwanger, Bavaria's deputy minister president.

MUNICH, Germany, Aug. 9 (Xinhua) -- Rising protectionist measures, particularly punitive tariffs, are undermining global industrial cooperation and slowing technological progress, Bavaria's deputy minister president told Xinhua in a recent interview.

Hubert Aiwanger, whose state is a hub for Germany's auto industry, said U.S. tariff hikes have hit German carmakers hard.

"Over the past few months, German auto exports were hit with tariffs of up to 27.5 percent, compared with just 2.5 percent previously," Aiwanger said. "Although a recent deal between the United States and the EU brought the rate down to 15 percent, the impact is still very painful and results in billions of euros in losses annually."

Bavaria has long been a leading exporter of vehicles to the United States. However, recent financial reports for the first half of 2025 from BMW and Audi, both headquartered in Bavaria, showed a sharp decline in profits.

Aiwanger warned that high tariffs not only hurt German and European industries but also drive up prices for consumers in the United States. Such policies, he said, are ultimately counterproductive and risk creating a lose-lose outcome for the global economy.

"We oppose high tariffs imposed by the United States," Aiwanger said. "The best solutions come from fair competition, not artificial barriers."

He emphasized that technical capability, not protectionism, should determine success in international markets. In his view, tariffs are being misused to block foreign products, which harms innovation and distorts trade.

Aiwanger also noted that forcing companies to build overseas factories in order to avoid tariffs undermines the principles of open trade. While large firms like BMW may be able to localize production in the United States, not every company can afford to follow suit.

"We need a fair environment where quality and technology are the main drivers of competition," he said.

During a recent visit to China, Aiwanger said he was impressed by the rapid development of the country's automotive industry, particularly in electric mobility, smart driving systems and user-friendly interior design. He called China one of Bavaria's most important trading partners.

"China is no longer just a large consumer market. It is becoming an increasingly important innovation partner for Germany's auto sector," he said, citing joint work in high-end manufacturing, renewable energy and digital technology. Chinese EV maker NIO has opened a design center in Germany to better understand local tastes.

The relationship between Bavaria and China is built on decades of deep-rooted ties. In 1975, then Bavarian minister president Franz Josef Strauss became the first senior West German official to visit China, a landmark moment that laid the groundwork for long-term cooperation. Today, about 700 Bavarian companies operate in China and more than 500 Chinese firms are located in Bavaria.

Aiwanger noted that as China's innovation capacity continues to rise, bilateral cooperation is shifting from traditional trade toward joint product development. Germany and China are increasingly working together to create globally competitive solutions in areas such as digitalization, intelligent manufacturing and green energy.

"We cannot rely on tariffs to make up for a lack of competitiveness," Aiwanger said. "Instead, we need reforms to strengthen our own industrial base. Companies like those from China are valuable partners in the process of global restructuring."

"Openness and mutual benefit are the right path forward," he added.■