The implementation of electric car tariffs by the White House has come as a surprise to many, but it is easily explainable. While Chinese electric cars are becoming increasingly popular in other parts of the world, they have not made much of an impact in the US market. As a result, the White House has implemented these tariffs as a precautionary measure, although some believe that it is also a way to signal to European allies to follow suit with electric car tariffs.
The EU has been ahead of the USA on this issue, with the EU Commission initiating an investigation into the subsidies that the Chinese government provides to its electric car manufacturers. French President Emmanuel Macron has been a strong proponent of electric car tariffs, urging for fair competition in the market. While some EU member states, like Germany, have concerns about the potential impact of tariffs on their automotive industry, others believe that it is necessary to respond effectively to China’s subsidies for electric cars. Economists suggest that tariffs of 15 to 30 percent may be necessary to level the playing field.
Chinese companies have begun setting up factories in other countries, like Mexico and Hungary, to potentially bypass tariffs and continue selling their cars at competitive prices. There are concerns that China may be able to minimize the damage from tariffs on its electric car sector while EU manufacturers could suffer from retaliatory measures. Ultimately, it remains unclear whether these tariffs will be effective or if they will only lead to further tension between China and Europe on this issue.
