The EU’s tariff hike on electric vehicles from China: The data behind the decision
For nearly a decade, China has been the linchpin of global supply chains, thanks to its competitive labour costs and vast manufacturing prowess, earning it a moniker as the ‘factory of the world’. China’s strong manufacturing position extends to the automotive industry. Against that backdrop, starting on 4 July 2024, the EU will implement tariffs, in the form of countervailing duties (CVDs) ranging from 17% to 38%, on Chinese electric vehicles (EVs). These duties on Chinese EV imports will be on top of an existing 10% duty, thereby reaching a peak of 48%. The decision to levy further duties follows an investigation by the European Commission launched in October to investigate Chinese subsidies distorting EV prices and posing unfair competition risks to European carmakers. Thus, the tariffs are applied on a company-specific basis, tailored to the level of subsidies allegedly received by Chinese firms.
The EU’s tariffs on Chinese EVs could be seen as a strategic move aimed at reducing its dependency on China in this sector whilst at the same time stimulating domestic EV production. While some may view this policy as protectionist or neo-mercantilist, it could alternatively be seen as a prudent industrial strategy to foster economic resilience for […]
Who’s promising what on international trade in the 2024 General Election?
June 25 2024
Sahana Suraj is a UKTPO Research Fellow in International Trade.
With less than two weeks until the United Kingdom elects its 59th parliament, campaigning efforts by contesting political parties intensified with the recent publication of party manifestos.[1] The UK is the fourth largest exporter of goods and services, so it is particularly important to shine light on the next government’s stance for developing a robust trade policy that maximises the benefits of trade consistent with domestic policy objectives.
Parties’ general stance on trade
While clearly there is a degree of overlap, the approaches to trade (policy) by the main parties—Conservatives, Labour, Liberal Democrats, Green Party, Reform UK—can be broadly categorised into three different groups.
One group, consisting of the Labour Party and Liberal Democrats, appears to align trade policy with industrial strategy. Concerned with building a resilient and secure economic future, their proposed course of action aims at capitalising on the UK’s existing economic strengths, including in services trade. This approach entails a focus on the depth and quality of agreements, forging strategic partnerships to create a pro-business and pro-innovation environment, and making trade more accessible.
This orientation to trade policy […]
Making Brexit work: An analysis of the Labour manifesto
18 June 2024
Alasdair Smith is a UKTPO Research Fellow, a researcher within the Centre for Inclusive Trade Policy (CITP), Emeritus Professor of Economics and Former Vice-Chancellor at the University of Sussex.
The 2019 General Election focused on the one issue of Brexit, and Boris Johnson’s victory enabled the UK to leave the EU. The evidence analysed by UKTPO and many others since then has confirmed the general expectation among expert economists at the time that Brexit would have negative economic effects. And recent opinion poll evidence is that a majority of voters think Brexit was a mistake.
To say that Brexit was a mistake does not imply it could or should be simply reversed. Yet, it is reasonable to expect the political parties to address the issue in their current election campaigns.
The Labour Party’s ambition for the future EU-UK relationship is set out in two paragraphs in their manifesto published on 13 June:
“With Labour, Britain will stay outside of the EU. But to seize the opportunities ahead, we must make Brexit work. We will reset the relationship and seek to deepen ties with our European friends, neighbours and allies. That does […]
Why discussion of Trade Policy matters in the General Election
30 May 2024 – I
ngo Borchert is Deputy Director of the UKTPO, a Member of the Leadership Group of the Centre for Inclusive Trade Policy (CITP) and a Reader in Economics at the University of Sussex. Michael Gasiorek is Co-Director of the UKTPO, Co-Director of the CITP and Professor of Economics at the University of Sussex. Emily Lydgate is Co-Director of the UKTPO and Professor of Environmental Law at the University of Sussex. L. Alan Winters is Co-Director of the CITP and former Director of the UKTPO.
A general election is underway, and the parties are making various promises and commitments to attract voters, and both the main parties – the Conservatives and Labour – are keen to persuade the country that they have a credible plan. Now it might just […]
Supporting UK prosperity through a renewed Board of Trade
22 May 2024
David Henig is Director of the UK Trade Policy Project at the European Centre for International Political Economy (ECIPE). He has written extensively on the development of UK Trade Policy post Brexit, in the context of developments in EU and global trade policy on which he also researches and writes. L. Alan Winters is Co-Director of the Centre for Inclusive Trade Policy (CITP) and former Director of the UKTPO.
One of the most heralded claims for Brexit was taking back control of UK international trade policy. Four years later, this is not widely seen as having been a success. Trade growth has been disappointing, the UK has become less open, exporting is still heavily concentrated in the Southeast of England, and there is little trust in Government pronouncements on trade. And yet there is almost no coherent discussion of trade policy and no evident strategy guiding future policy objectives or the signature of new trade agreements.
Part of the issue is that thinking about trade policy is trapped in the remnants of the Brexit debate and substantially seen in party political terms; it is consequently lacking any broadly accepted understanding. This is unsatisfactory and as part of the solution […]
What are the potential effects of implementing common user charges? An insight into UK border dynamics.
23 April 2024
Adriana Brenis is a Research Fellow of the UK Trade Policy Observatory (UKTPO) at the University of Sussex Business School. She holds an MSc in Business, Finance and Economics and a PhD in Economics from the University of Sheffield. Adriana’s research focuses on international trade, economic policy analysis and innovation.
The UK government recently announced its plan to implement common user charges for imports coming into the country. This has generated some controversy and, just this week, rumours that the government may again suspend the introduction of elements of the new Border Target Operating Model (BTOM).
The common user charges, set at a flat rate of £10 or £29 per commodity line, are capped at 5 charges per consignment, resulting in a maximum fee of £145. These charges will be applied to low-risk products of animal products (POAO), medium and high-risk animal products, along with plants and plant products. Initially, they will only be collected at border controls in Dover and Eurotunnel starting April 30th. This is part of the new BTOM system, aimed at improving border procedures. The goal is to cover the expenses of running these border facilities while […]
“There Ain’t No Rules in a Knife Fight” and probably not enough in the WTO
23 February 2024
Peter Holmes is a Fellow of the UK Trade Policy Observatory and Emeritus Reader in Economics at the University of Sussex Business School. Sunayana Sasmal is a Research Fellow in International Trade Law at the Observatory.
The World Trade Organization (WTO) dispute settlement system is in crisis. Here, and in a comprehensive working paper, we discuss one potential solution to one of the many issues confronting it. Non liquet is a legal principle that allows a tribunal to decline rendering a ruling when there is no law. We think this concept could partially address the major issue of judicial overreach. But first, some background.
Some goods (and some less good) news from UK trade
16 February 2024
Michael Gasiorek is Director of the UK Trade Policy Observatory and Co-Director of the Centre for Inclusive Trade Policy. He is Professor of Economics at the University of Sussex Business School. Nicolo Tamberi is Research Fellow in Economics at the University of Sussex and Fellow of UKTPO.
HMRC has just published statistics for trade in goods for December 2023, giving us three years of data after the implementation of the Trade and Cooperation Agreement (TCA) with the EU in 2021. This blog reviews trends in UK trade with the world and the effects of the TCA on […]
What the extended grace period for Electric Vehicle Rules of Origin tells us about the UK-EU relationship
4 January 2024
Guest author David Henig is Director of the UK Trade Policy Project at the European Centre for International Political Economy (ECIPE). He has written extensively on the development of UK Trade Policy post Brexit, in the context of developments in EU and global trade policy on which he also researches and writes.
There was relief for Europe’s automotive sector at the start of December when the UK and EU agreed to maintain current product specific rules of origin for electric vehicles within the Trade and Cooperation Agreement (TCA) until the end of 2026. A scheduled intermediate stage of tightening on the way to even more stringent final rules to take effect from January 2027 was abandoned. Industry in both the UK and EU had been warning of potential 10% tariffs without an agreement and welcomed the move.
At the most basic level, this extension demonstrated that the UK and EU can find ways to improve their trading relationship. This had previously been shown with the agreement of the Windsor Framework to supplement the Northern Ireland Protocol to the Withdrawal Agreement, reached in February 2023, as well as full UK accession to the Horizon science research programme, scheduled to […]
Do labour and environmental provisions in trade agreements lead to better social and environmental outcomes in practice?
13 December 2023
James Harrison is Professor in the School of Law at the University of Warwick. Emily Lydgate is Professor in Environmental Law at the University of Sussex and Deputy Director of the UK Trade Policy Observatory (UKTPO). Ioannis Papadakis is a researcher at the Centre for Inclusive Trade Policy (CITP) and a Research Fellow in Economics. Sunayana Sasmal currently serves as a Research Fellow in International Trade Law at the UKTPO. Mattia di Ubaldo is Fellow of the UKTPO and Research Fellow in Economics of European Trade Policies. L. Alan Winters is Founding Director of the UKTPO, Co-Director of the CITP and Professor of Economics at the University of Sussex.
In answering this important question, different disciplinary approaches have emerged as have a range of different and sometimes contradictory findings. At the moment, scholars from the different disciplines are not talking to each other about the implications of this. The authors of this blog suggest it is vitally important that they begin to do so.
Trade agreements around the world increasingly include environmental and labour provisions. Their presence attests to policymakers’ recognition that trade agreements cannot simply focus on economic issues. They should also address environmental and social concerns. […]
