The trade dispute between the EU and China has its roots in the global competition over the rapidly expanding electric vehicle (EV) market. In an effort to protect European car manufacturers from what they perceive as unfair competition, the European Union decided on October 4, 2024, to impose new tariffs on Chinese-made EVs. These tariffs target the subsidies allegedly provided by the Chinese government to its automakers, which make their vehicles significantly cheaper than those produced in Europe.
China’s response has been swift, beginning with the imposition of up to 39% anti-dumping duties on French cognac, a move widely interpreted as a warning shot. China has signaled that it could further escalate its retaliation by targeting European pork, dairy products, and even automobiles if the situation worsens. These tit-for-tat measures indicate that the trade tensions between the EU and China are set to deepen, with no easy resolution in sight.
2. Failed Compromise and German Influence
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