European Union has placed a tariff of 38% on electric vehicles that are imported from China. A few key points about this:A few key points about this:
- They are levied on imported goods and are hence a form of tax. In this case, the EU is targeting Chinese electric cars qualitatively by imposing a 38% tariff on them. This will make Chinese EVs expensive in Europe and reduce their market share there, and this makes the success of Chinese EV firms there highly unlikely.
- The probable reason for such a decision may be the need to defend and promote European ‘green’ car manufacturers against competition from China. Since the imposition of tariffs, Chinese EVs are not as competitively priced as they were before.
- This could fuel trade tensions between the two regions especially between the EU and china. China has threatened to impose counter tariffs on European automobiles through additional tariffs on imported cars. Duties disagreements can invariably lead to reciprocal measures.
- The 38% is a high tariff rate which can significantly reduce the competitiveness of Chinese EV exports to Europe – one of the key regions of future expansion. But this can be problematic for Chinese car makers, which may attempt to avoid the tariffs by establishing their final assembly plants in Europe.
In the long run, this appears to be an economic protectionism from the EU to protect its battery and EV industry from the increase in Chinese competition. But for a higher price, it poses more significant threats to trade. More information would also be useful in order to trace the background and consequences of this particular decision to apply the tariff. Yet the headline indicates the main action that took place as per the EU here.
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