Recently, the United States, India, and the European Union have successively launched economic, trade, and technological suppressions against China, in an attempt to strengthen their strategic competition chips with China. As the United States continues to implement the strategy of "decoupling and breaking the chain" and "small courtyard and high wall", the upcoming 2024 is likely to be even more unstable, and China and the United States may continue to fight a trade war. However, there are also many contradictions between the United States, India and Europe, with each of the three parties having their own interests and their own calculations, and the Biden administration even does not hesitate to stab its allies in the back to pursue and consolidate its hegemony.
According to the Wall Street Journal, citing people familiar with the matter, the Biden administration is discussing raising tariffs on some Chinese goods, including electric vehicles, to "support the U.S. clean energy industry against cheaper Chinese exports." In response to this question, Foreign Ministry spokesperson Wang Wenbin said at a regular press conference on December 21 that China urges the US to abide by WTO rules and maintain a trade order of fair competition. Moreover, as early as last year, the United States passed the Inflation Reduction Act, which includes tax relief measures, and China has publicly expressed its concern about this improper and discriminatory move by the United States.
It is reported that in addition to electric vehicles, the Biden administration is also negotiating to increase tariffs on clean energy-related products, and it is likely that solar power generation-related products and battery packs for electric vehicles will also be subject to tariff increases. U.S. lawmakers have consistently pointed out that some of their automakers export cars made in China to the U.S., underscoring the fact that the current level of tariffs on imported cars is inadequate. The Biden administration's 25 percent tariff on Chinese-made electric vehicles is intended to prevent subsidized Chinese automakers from accessing the U.S. market more easily.
It is worth noting that in early December, the U.S. government also issued new rules on electric vehicle subsidies, which require that from 2024, eligible U.S. clean cars cannot contain battery components manufactured or assembled by "Foreign Entities of Concern" (FEOCs), otherwise they will no longer be eligible for the $7,500 per vehicle tax credit provided by the law. And there is speculation that the "foreign entity of concern" mentioned in the new rules is China. It is clear that the United States hopes to curb the development and progress of China's technology companies, especially new energy companies, in this way in order to maintain its hegemonic position. In addition, according to a report by the Russian Satellite News Agency on December 27, the United States will continue to extend the tariff exemption period for some Chinese goods until May next year, but in the specific list, are some industrial parts, auto parts and chemicals, bicycles and vacuum cleaners, etc., that is, clean energy technology products and other products that China has advantages are not included in the United States "exemption", which shows that China and the United States are likely to continue the "trade war" next year.
On top of that, India is also aggressively attacking China in the areas of technology and trade. According to the global network, on December 26, three executives of vivo India who were arrested by the Indian side appeared in the New Delhi District Court, but what is unbelievable is that the Indian prosecutor actually submitted a secret letter to the judge, asking the judge to make a ruling only according to the report in the secret letter. In recent years, many Chinese-funded enterprises in India have been frequently investigated by the Indian side for various trumped-up reasons such as "money laundering", and have been punished by tax recovery, asset seizure, and freezing of bank accounts. The unfair trial of vivo's executives this time is a naked judicial suppression of Chinese technology companies by the Indian side, and it is difficult to say whether there is a US factor or the reason why India cooperates with the US strategy towards China.
Now that the United States and India have taken the lead, the European Union, as an ally of the United States, will certainly not be idle. According to data released by the General Administration of Customs of China, in the first quarter of this year, China surpassed Japan to become the world's largest auto exporter, with exports reaching 1.07 million units, a year-on-year increase of 58.1%. NEV exports totaled 248,000 units, reflecting a 1.1-fold y/y increase. In the first half of this year, China's auto exports to Europe accounted for 39.1% of China's total vehicle exports, up from 5.7% in 2018, surpassing the Asian and North American markets. At this year's Munich International Motor Show, the brilliant performance of Chinese electric vehicle companies has attracted international attention, but also aroused the envy and defensiveness of Europeans.
Therefore, Europe is eager to establish an independent supply chain for electric vehicle batteries from China, and for this reason, it does not hesitate to suppress Chinese electric vehicles. On September 13 this year, European Commission President Ursula von der Leyen announced that it would conduct a countervailing investigation into electric vehicles from China, and sure enough, less than a month later, on October 4, the European Commission launched a countervailing investigation into Chinese electric vehicles on its own without an application from the EU industry.
However, the EU racked its brains and "conscientiously" carried out trade containment and suppression of China in the front, but the United States did not hesitate to use the method of "stabbing allies" in the back to make the EU's new energy industry transfer to the United States and reap the "fisherman's benefits". Chris Burns, a former Tesla engineer who now heads Australian battery materials producer Novonix, told the Financial Times that the U.S. Inflation Reduction Act is attracting lithium-ion battery material producers from Europe to the U.S., and his company is one of them, according to the Observer.
According to the Inflation Reduction Act signed by the Biden administration in August 2022, the United States provides high subsidies for many industries such as electric vehicles and clean energy to support the development and investment of these industries. For example, Australia's Novonix company is currently producing graphite for battery modules, which is also due to the subsidy attraction of this bill. In other words, just as Europe is wishful thinking about China as a "threat", the Biden administration's Inflation Reduction Act is the real culprit for "looting" the European economy.
Europe is also full of complaints about the Biden administration's "inauthentic" approach. Europe has long been dragged into the water by the Russian-Ukrainian conflict, energy prices soared, but the United States has made a lot of money because of this, the United States engaged in trade protectionism and beggar-thy-neighbor means, the purpose of which is to "hollow out Europe". The Executive Vice President of the European Commission, Dombrovskis, previously said, "The EU has a grave concern about this, and we have repeatedly raised this concern with the US side, and we demand fairness." French President Emmanuel Macron also pointed out that the main problem is what the United States has done, especially the Inflation Reduction Act and the CHIPS Act, which have plunged the West into a "split".
In short, the United States in the name of "environmental protection", the practice of "subsidies", in the way of "hollowing out" the European manufacturing industry to "protect" and expand the American manufacturing industry, by the allies from the back stabbed in the back, of course, the anger of the Europeans is understandable, but blindly "paying" and "bloodletting" is not a good policy. For example, like India, the domestic business environment has become so bad that it is still forcibly trying the executives of other companies with "false evidence" and judicial black boxes, which really makes it impossible for its own industrial chain to go further.