Who will be the biggest beneficiary of the 100% tariffs imposed by the U.S. on Chinese electric vehicles?

Zheng Yi

2024-05-16 10:04Published in Shandong

Countries around the world are considering how to prevent Chinese-made electric vehicles from entering the market. The U.S. government announced a 100% tariff increase for Chinese-made electric vehicles. Among them, the results of the analysis show that if all countries in the world raise tariffs on Chinese-made electric vehicles, then the automobile exports of the United States, Japan, South Korea, Europe and other developed countries will increase.

According to a study by the U.S. International Trade Commission (USITC), if the United States, the European Union, Japan, South Korea and the rest of the world were to raise tariffs on Chinese electric and hybrid vehicles by 20 percent, China's exports to those countries would be significantly reduced.

By region, exports of electric and hybrid vehicles made in China decreased by 59.6% in Japan, 60.2% in South Korea, 62.9% in the United States, 53.4% in the European Union, and 60.3% in the rest of the world.

The report predicts that a decrease in China's exports will lead to an increase in exports from other countries. Exports of electric and hybrid vehicles in the U.S. increased the most by 13.6 percent, followed by South Korea at 10.0 percent, the European Union at 7.8 percent, and Japan at 4.6 percent. In other words, South Korea and the United States are actually the biggest beneficiaries. Domestic EV and hybrid vehicle production will also increase in Japan (4.6%), South Korea (7.5%), the United States (6.5%), and the European Union (7.8%), thanks to higher exports.

It is estimated that as China's electric vehicle sales slow, the market economy will be reduced by $2.6 billion. On the contrary, the United States is expected to make profits of about $709 million, South Korea $173 million, and Japan $125 million.

On the contrary, it is also assumed that all countries in the world will increase tariffs on Chinese-made EV components by 20%. In this case, China's exports of electric vehicle components fell by 23.9%. Conversely, other countries saw significant increases in EV component production, with an increase of 23.1% in Japan, 37.9% in South Korea, 22.1% in the United States, and 43.8% in Europe.

But they have a negative attitude towards the production of electric and hybrid vehicles. This is because EV production in Japan and the U.S. increased by 2.7% and 1.9%, respectively, while EV production in South Korea and Europe fell by 4.1% and 11.4%, respectively. This is due to the increase in the price competitiveness of Chinese-made electric vehicles, and the decline in the prices of Chinese-made parts used in the production of electric vehicles in China, which correspondingly decreased the export price of Chinese electric vehicles by 0.06%.

Tesla's Giga Shanghai plant produced more than 2 million vehicles last year.

Some experts believe that even if the United States imposes massive tariffs, it will not have much impact on China's EV exports. Xiang Jiang, director of the International Cooperation and Investigation Center for Digital Vehicles of the World Economic Forum (WEE), an international non-governmental organization, pointed out in an interview with the Global Times: "Most of the electric vehicles from China to the United States are made in the Chinese factories of American brands. He went on to say, "There are almost no Chinese brands that export to the United States. The U.S. government's tariff hike will cause greater losses to U.S. businesses and consumers. ”

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