EU tests its mettle to take on China with new EV tariff fight

The European Union unleashed one of its most powerful economic tools on China, imposing tariffs on electric vehicles in a move that increases the risk of retaliatory measures and backfiring on domestic consumers and companies.

The EU voted on Friday to boost tariffs as high as 45%, arguing that Beijing provides unfair subsidies to its carmakers. While the bloc is aligning with the U.S.’ more aggressive approach to taking on Chinese trade practices, the latest move intends to comply with World Trade Organization rules.

French President Emmanuel Macron warned this week that Europe’s economic model “needs to be reset,” and failure to account for the U.S. and China’s greater domestic investment and market protections could be an existential threat for the EU. The bloc’s leaders are expected to unveil a new competitiveness roadmap next month.