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The Global Implications of EU Tariffs on Chinese EVs

Recently announced US and EU tariffs on Chinese electric vehicles will create two opposing forces in the rest of the world. By shutting Chinese EVs out of the US and EU markets, they may drive an increase in Chinese exports elsewhere; but that may put pressure on those governments to introduce their own higher tariffs.

NEW YORK – On June 12, the European Union announced new provisional levies on Chinese electric vehicles (EVs), with the tariff level to be based on estimates of how much state support an EV exporter receives. The new tariffs follow from a months-long investigation into China’s use of financial subsidies, and they will be imposed on top of the 10% tariff that the EU already has in place. They are “provisional” because they might be revised downward if Chinese producers can offer evidence that the support they receive is less than estimated. Separately, if the EU can reach an agreement with China to reduce the volume of Chinese EV exports to Europe, the new tariffs may not be implemented.