(Bloomberg) -- German Chancellor Olaf Scholz played down fears of a potential trade war triggered by the European Union’s anti-subsidy investigation into Chinese electric vehicles, while making a strong case for globalized markets with a level playing field for all participants.

In his first comments on the EVs probe since it was announced two weeks ago, Scholz appeared to pour cold water on the European Commission’s move, and warned against protectionist measures that could harm domestic industries. When the possibility of an EU—China trade war was broached, he said: “Obviously that will not happen.”

“We want to sell our cars in in Europe, in North America, in Japan, in China, in Africa, in South America, in all the places,” he said Thursday in a discussion with Bloomberg’s Stephanie Flanders at the Berlin Global Dialogue.

“But this means that we are also open to get the cars from other countries on the German market,” he added. “Now there are German cars in Korea, and Korean cars in Germany — what is the problem?”

Germany stands to be the country most affected in the EU in the event of a tit-for-tat tariff dispute with China. If levies are imposed, Beijing’s most powerful response would be to restrict access to its vast market — something that would hit German automakers including Volkswagen AG and BMW AG hardest as they collectively sold 4.6 million cars there last year.

China initially reacted aggressively to the Sept. 13 announcement by Commission President Ursula von der Leyen, calling it “a naked act of protectionism.” That stoked concerns about a potential trade war but they eased after a subsequent trip to China by the EU’s Valdis Dombrovskis.

During the Trade Commissioner’s visit, President Xi Jinping’s government avoided the kind of rhetoric that could endanger an economic relationship worth $900 billion, while Vice Premier He Lifeng agreed to set up several working groups, including on financial services and trade.

Earlier, the head of the body that represents EU heads of state and government, also sought to dial down any apparent tension with China on the EVs issue.

Europe is not spoiling for a trade war and is instead focusing on a “rebalancing” to avoid excessive reliance on one country, Charles Michel, the president of the European Council, said in an interview with Bloomberg Television on the sidelines of the Berlin meeting.

“We’d like to rebalance our relationship with China to address critical vulnerabilities,” Michel said. “It’s never good when you’re so dependent on one country.”

Following the invasion of Ukraine by Kremlin forces last year, Europe had learned its lesson from becoming over-reliant on Russia for fossil fuels and was now applying that to its relationship with China, he added.

“Within the EU there’s a common view, common vision that we need to rebalance our economic relationship, address our vulnerabilities. We are engaging a lot with China and I’m confident that we can protect the European interest.”

(Updates with Scholz comments starting in first paragraph)

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