Despite trade negotiations between China and the EU in the weeks following the preliminary findings, final tariffs were not avoided. Given that this anti-dumping investigation was opened by the European Commission and not the industry, there are concerns that it may be motivated more by political interests than purely economic reasons. Indeed, several member states – including Germany, Slovakia, Slovenia, Hungary and Malta – have opposed additional customs duties. However, a qualified majority (15 member countries, representing 65% of the EU population) could not be obtained to oppose the tariffs due to the diverse interests of EU members and different sectors subject to retaliatory investigations by China, which has targeted each member differently.

Although we see some retaliatory tariffs on brandy (mainly French), pork (mainly Spanish) and possibly also (mainly German/Slovak) on cars, we do not expect an escalation of trade policy in the future. American. Both parties want to avoid a major tariff escalation. For China, the EU market is an extremely important sales market, ranking second after ASEAN. But also for the EU (and in particular the German manufacturers VW, BMW and Mercedes), China remains an important export destination; the EU’s overall share of its extra-EU exports stood at 8.7% in 2023, making China the third largest export destination after the United States with 19.7% and the United Kingdom with 13.1%.

Imports from China are even more important. 20.6% of the EU’s extra-EU imports come from there, making China the largest source of imports, followed by the US with 13.8% and the UK with 7 .2%. With a heavy reliance on Chinese essential components – particularly batteries and the refined materials behind them – a deterioration in trade relations and new customs duties represent a significant risk for European manufacturers. This likely explains why the EU continues to follow a balanced approach, opting for a middle ground rather than imposing full tariffs on Chinese electric vehicles as the US has done. Finally, given possible tariff escalations between the United States and China after the American elections, as well as between the United States and Europe, trade relations between the EU and China could ultimately improve again.