In October 2023, the European Union launched an investigation into whether Chinese electric vehicle (EV) manufacturers were receiving unfair subsidies which give them an advantage in the market. In June 2024, the European Commission announced the preliminary conclusion that it would levy additional tariffs of between 17.4ؘ–38% on Chinese electric vehicles (EVs). This would be placed on top of an existing 10% import duty. These duties are set to provisionally come into effect in early July, with a proposal for permanent measures expected in November, subject to a decisive vote.

In this episode of The Sound of Economics, Yuyun Zhan sits down with Alicia García-Herrero and George Magnus to discuss the EV investigation, the impact of China’s industrial policy on its mass-production growth model, why this approach is now facing resistance, and the broader implications of China’s overcapacity for the EU and the global market.

García-Herrero, A. and R. Schindowski (2024) ‘Unpacking China’s industrial policy and its implications for Europe’, Working Paper 11/2024, Bruegel

Red Flags: Why Xi’s China is in Jeopardy, book by George Magnus

The story of China’s electric vehicle industry, Bruegel podcast with Giuseppe Porcaro, Alicia García-Herrero and Zeyi Yang

This episode is part of the ZhōngHuá Mundus series of The Sound of Economics. ZhōngHuá Mundus is a newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe. Sign up now to receive it in your mailbox!