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Trade Wars: Protectionism and its impact on Finished Vehicle Logistics

Trade Wars: Protectionism and its impact on Finished Vehicle Logistics
While intended to bolster domestic industries and foster sustainable growth, the efficacy of stringent duties in dissuading Chinese exporters remains uncertain

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The world of vehicle logistics is facing a critical juncture as economic competition between China, the US, and the EU intensifies and protectionist policies expand. The US recently announced a plan to sharply increase import duties on a range of strategic goods from China, including EVs, lithium batteries, semiconductors, critical minerals, solar cells, steel, and aluminum. President Biden commented that the move is aimed at curbing the influx of Chinese EVs and nurturing the domestic industry. In response, the EU has launched an anti-subsidy investigation into the imports of battery electric vehicles from China, with the aim of protecting its automotive industry from unfair competition. The investigation found that China was dumping EVs into Europe, leading to the imposition of retroactive charges and registration requirements for new battery electric passenger vehicles from China. However, experts believe that these protectionist measures may only serve as temporary restraints and cannot ultimately stop the flow of trade. Chinese automakers are already considering establishing local production capabilities in Europe to circumvent trade tariffs, with plans to push the market share of Chinese brands across Europe towards 10% by 2030. The long-term ramifications of these protectionist policies on global supply chains and vehicle logistics remain uncertain.