US tariffs on Chinese electric vehicles: impact on Europe

On 14 May, United States President Joe Biden announced new tariffs on China under Section 301 of the Trade Act of 1974 (unfair trade). The additional tariffs – on top of earlier tariffs, including those imposed by President Trump – cover imports from China in several sectors, including semiconductors (tariff rises from 25 percent to 50 percent), solar cells (from 25 percent to 50 percent), electric vehicle batteries (from 7.5 percent to 25 percent) and electric vehicles (EVs; from 25 percent to 100 percent).

Most of these products are already subject to high duties or extensive trade-remedy measures, so the amount of imports from China covered by the new tariffs, including EVs, is small at $18 billion. In fact, the US imports essentially no EVs from China. However, it is a sector of great concern to the European Union, which in October 2023 opened an anti-subsidy investigation into Chinese EVs, which may trigger countervailing duties. The US move may therefore have implications for the pending EU decision on countervailing duties on China.

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