(June 4): An escalating trade spat between China and the West would fuel inflation and delay the transition to a cleaner economy, said former Volkswagen AG chief executive officer Herbert Diess.

China has managed to radically cut the cost of solar energy and batteries and is already suffering from trade hurdles put in place by the US, Diess said during a conference organised by BloombergNEF in Munich.

“If this conflict gets out of control and too far, the whole world will suffer a lot,” said Diess, now chairman of chipmaker Infineon Technologies AG. Pushing semiconductor manufacturers out of Taiwan into Europe and the US, for example, “will double the prices.”

The EU has opened a barrage of trade probes against Beijing over claims of dumping and unfair subsidies, especially in the clean-technology sector. Tensions are high as Brussels moves closer to a decision on tariffs on Chinese electric vehicles to protect its local manufacturers.

Beijing has signalled it’s ready to retaliate if the EU follows the US, which last month unveiled sweeping tariff hikes on a range of Chinese imports including EVs.

The world should be “very happy” that China invested so much in renewable energy technology including solar cells in the past years, Diess said.

“I don’t think any other country could have scaled it up so far and for so cheap,” he said.