China’s electric vehicle (EV) industry has evolved rapidly in recent years, transforming the global automotive landscape. With affordable prices, cutting-edge technology, and massive production capacity, China has positioned itself as a leader in the global EV market.
Yet, as the country’s industry gains momentum, it has become the target of what can only be described as protectionist measures — tariffs that unfairly penalise its products. The US, the EU, and Canada have all imposed heavy tariffs on China’s EVs, raising concerns about fairness and compliance with World Trade Organization (WTO) rules.
China’s rise in the EV sector is no accident. Through vast investments in infrastructure, and a commitment to green technology, the country has nurtured an ecosystem where EV manufacturers thrive. By leveraging economies of scale, China has been able to produce affordable EVs, making them accessible to the global market.
Companies like BYD and NIO have become household names, offering everything from economy models to high-end luxury EVs, all at competitive prices. These cars boast cutting-edge battery technology, long-range capabilities, and sleek designs, appealing to a diverse consumer base globally.
With increasing environmental concerns and a shift toward cleaner energy, demand for EVs has rocketed worldwide. China, having invested early in this sector, is now reaping the rewards, rapidly expanding its market share not only domestically but also internationally.
The Tariff War: unfair and protectionist policies
As China’s influence in the global EV market has grown, so too has resistance from traditional automotive powerhouses in the US and EU. In what appears to be a co-ordinated effort, these regions have implemented punitive tariffs on Chinese EV imports, citing various reasons such as protecting domestic industries or claiming national security concerns.
However, these tariffs fly in the face of the WTO’s principles of free and fair trade. Under WTO rules, members are prohibited from imposing arbitrary tariffs unless justified by legitimate concerns. In the case of EVs, the tariffs imposed on Chinese vehicles seem more like a knee-jerk reaction to protect domestic manufacturers, who have struggled to compete with China’s price and technological advantages.
The EU, for instance, recently imposed anti-dumping duties on Chinese EVs, claiming that the vehicles were being sold below market value, a practice known as “dumping”. Yet, this argument overlooks the legitimate advantages China has built over the years. China’s lower production costs and government support do not equate to unfair trade practices; they are simply the fruits of strategic planning and investment.
The US and Canada have also taken similar steps, with the US citing “national security” under Section 232 of its Trade Expansion Act. However, applying this clause to EVs is a stretch, to say the least. The vehicles in question pose no conceivable threat to national security, raising questions about the true motivations behind these tariffs.
Bullying under the guise of protectionism
These protectionist measures are not isolated incidents but part of a broader trend of economic bullying by Western powers. China’s growing dominance in the EV sector represents a challenge to the long-held supremacy of the US and European automakers, prompting these regions to erect trade barriers in a desperate attempt to maintain their market positions.
The irony is that while Western countries frequently champion free-market principles, they are quick to abandon them when a non-Western country begins to lead in a key industry. China’s EV industry has not only met but often exceeded international standards for quality and innovation, yet rather than engage in fair competition, Western countries are resorting to punitive measures.
Such tactics also raise the question: Are these tariffs an attempt to slow down the inevitable transition to electric vehicles in the West, driven by legacy automakers reluctant to embrace change? The imposition of these tariffs seems like a last-ditch effort to cling to outdated models of industrial dominance, hindering both technological progress and the global push for environmental sustainability.
The WTO’s role and the need for reform
The WTO was established to ensure that international trade is conducted in a fair and transparent manner. However, the actions of the US, EU, and Canada raise serious questions about the WTO’s ability to uphold these principles. While China has filed complaints against some of these tariffs, the resolution process within the WTO can be slow and cumbersome, giving powerful nations leeway to act with impunity in the meantime.
There is an urgent need for reform within the WTO to ensure that its rules are applied consistently and that no country, no matter how powerful, can undermine the system for its own benefit. The organisation must be strengthened to prevent economic bullying and ensure that emerging industries, like China’s EV sector, are given a fair chance to compete on the global stage.
China’s rise in the EV industry should be celebrated, not punished. By embracing clean energy and driving down costs, China is playing a pivotal role in the global fight against climate change. Yet, the West’s response ‒ unfair tariffs ‒ threatens to derail this progress, prioritising protectionism over global cooperation.
Rather than resorting to economic bullying, the US, EU, and Canada should focus on competing through innovation, investment, and collaboration. The world is transitioning to a cleaner, greener future, and China’s role in that future cannot be ignored. It’s time for the international community to embrace fair competition and ensure that the rules of global trade are upheld, not manipulated to serve narrow interests.
Sikho Matiwane is a seasoned entrepreneur and the founder and Director of Matiwane Diplomatic Consulting. He also serves as the Chairperson of Global South Affairs. As a diplomatic commentator, he specialises in International Relations and Geopolitics.
The Star