Should Europe put extra tariffs on Chinese electric vehicles?

Publishing date
06 May 2024
Niclas Poitiers
Picture of a stack of newspapers

Chinese exports of electric vehicles (EVs) are surging and the European Union is investigating whether they have been supported by undue government subsidies. If such support were to be found, the EU could impose extra tariffs on these EVs. But should it do so?

Some who oppose such tariffs argue that the economic cost of Chinese retaliation could exceed any benefits and that slowing down imports of cheap Chinese EVs could slow down the green transition. Others think that the EU should implement similar measures to the US and all but ban Chinese EV technology from the EU market.

However, this dichotomy neither reflects European interests nor the choice at hand. The goal of these extra tariffs would not be to ban Chinese EVs but to nullify the effect of government subsidies. Chinese car manufacturers would still be able to export to the EU and compete on commercial grounds. But they would be denied an unfair advantage vis-à-vis manufacturers from the EU and other emerging markets.

China’s new strategy to deal with geopolitical headwinds and its domestic economic problems seems to double down on state support for industries of strategic importance. This will put more and more state supported Chinese exports in direct competition with the EU and in sectors of traditional strength for Europe. At this juncture, it is imperative that the EU stands up for its commercial interests. Otherwise, we should not be surprised if China assumes European acquiescence in its mercantilist plans.

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About the authors

  • Niclas Poitiers

    Niclas Poitiers, a German citizen, joined Bruegel as a research fellow in September 2019.

    Niclas' research interests include international trade, international macroeconomics and the digital economy.  He is working on topics on e-commerce in trade as well as European trade policy in global trade wars. Furthermore he is interested in topics on income inequality and welfare state policies.

    He holds a Ph.D. in Economics from Universitat de Barcelona, a M.Sc. in economics from the Universität Bonn, and a B.Sc. from Universität Mannheim. During his Ph.D. he was a visiting scholar at Northwestern University.

    Niclas is fluent in English, Spanish, and German.

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