Jun. 25, 2024 |

Trade War II. China’s Commerce Ministry announced this week that the People’s Republic and the European Union have agreed to hold last-minute talks about staving off major new EU tariffs on Chinese electric vehicles. After finding that Beijing was unfairly subsidizing its EV automakers, the European Commission had decided that, as of July 4, it would impose a 38 percent tariff—on top of an existing 10 percent duty. Which are just a couple among many trade measures Europe and the U.S. have taken—or are considering taking—to address an ongoing surge in the production of advanced Chinese technologies like EVs, solar panels, and semiconductor chips.

In May, Alice Han explored the apparent trade war emerging behind these events between China and the West. Han says China is significantly expanding its industrial capacity in part to revive its flagging economy—but also to pursue its goal of dominating high-tech manufacturing globally. Brussels and Washington are responding with tariffs and investigations into subsidies that might violate World Trade Organization rules, while the political mood in both capitals has turned in favor of more aggressiveness toward Beijing. At the same time, Han says, individual European member states still hold different positions on trade with China—which is why the EU’s whole approach remains so much a work in progress.