EU risks missing opportunities by following US lead on sanctions against China

The US imposition of additional tariffs on electric vehicles (EVs) from China has triggered a chain reaction of protectionism in the emerging sector, reshaping the global auto industry by impacting not only Chinese automakers but also European ones.

Volvo has postponed U.S. deliveries of its EX30 electric vehicle due to U.S. tariffs on Chinese EV exports, Reuters reported on Wednesday. To get around the tariffs, the Swedish automaker is expanding production of the EX30 SUV to a plant in Belgium, aiming to serve markets in North America and Europe.

In a complex trade landscape, Volvo’s delivery delay is just one example of the disruption and uncertainty caused by tariff policies on multinational automakers. These policies are forcing companies to make difficult decisions and introducing new challenges for consumers and the entire industrial chain.

High US tariffs, initially targeted at the Chinese EV industry, are also negatively impacting the development of the EU automotive industry. This suggests that the tariffs are aimed at influencing the global EV industry through aggressive trade policies. The consequences include retaliatory actions by the EU against Chinese EVs and a growing controversy, reflecting tensions and protectionist trends in current global trade.

China has long been a preferred destination for global automakers seeking cost efficiency and production capacity. However, protectionist policies are forcing multinational automakers to reconsider their global production strategies and make significant adjustments.

Volvo’s move of part of its production to Belgium exemplifies these changes, but also points to potential challenges such as increased costs, supply chain reorganization and operational complexities. These adaptations could compromise production efficiency and affect the competitiveness of European automakers in the global market.

Furthermore, the EU should carefully consider its tariff policies in response to the US moves. The strategic partnership between the EU and China in the EV industry is vital, involving technology sharing and supply chain alignment. Any hasty decision to follow US tariffs could undermine these collaborations and harm the EU’s long-term economic interests.

While trade negotiations between China and the EU are already underway, it is crucial for the EU to avoid actions that could trigger an escalation of trade disputes. Maintaining a sensible balance between commercial and strategic interests is essential to foster a stable global environment conducive to the sustainable development of the automotive industry.

Via Global Times.